Sales of flags of the United States of America or of the State of New Jersey are exempt from New Jersey sales and use tax.
This exemption is limited to sales of actual flags. It does not apply to mere representations of flags or to merchandise with a flag theme. The following are all examples of taxable items: framed prints of the United States flag; windsocks with a flag theme; flag stickers; flag pins, tie tacks and other jewelry; tote bags imprinted with an image of the flag; dolls, teddy bears, Santa Claus figurines carrying a miniature flag; red, white, and blue ribbons; wooden flag plaques. However, because there is a separate statutory exemption for clothing, sales of T-shirts, hats, neck scarves, socks and other clothing items decorated with flag prints or flag embroideries are of course not subject to New Jersey sales tax.
If a vendor sells the actual flag banners, the pole, and the finial separately, the exemption applies only to the sale of the flag banner itself. Sales of the various pieces of hardware sold separately are subject to tax. However, if a complete flag is sold as part of a ready-to-assemble kit, including, for example, the banner, post, finial and cord, the lump sum charged for the kit will be viewed as a charge for an exempt flag and will therefore be exempt from sales and use tax.
Sales of flags of other nations, of the United Nations or of other states are not exempt from New Jersey sales tax. The statutory exemption from New Jersey sales and use tax is limited to sales of the official flags of the United States of America and the State of New Jersey.