When revenue needs to be raised to plug budget gaps and mask overspending, government often looks to so-called “sin taxes” as an easy solution. Sin taxes are levies on any vice or product deemed harmful or morally questionable, and are politically attractive because they generate large sums of money without raising more far-reaching taxes, such as property taxes or income taxes.
In the proposed fiscal year 2026 state budget, Gov. Phil Murphy taps many of the sin taxes to raise revenue. Those proposals include an increase in the alcoholic beverage tax, cigarette tax and cannabis taxes, to name a few. While any tax increase will make New Jersey less affordable and less competitive, the proposal that caused the most concern was a significant increase in the internet gaming (15%) and online sports wagering (13%) tax rates to 25% in both cases.
