TRENTON, NJ — Gov. Phil Murphy unveiled his proposed budget for the 2026 fiscal year last week and it includes new tax hikes on items and activities ranging from guns to sports betting to real estate transfers.

Murphy, a Democrat, outlined his budget proposal on Feb. 25. The plan calls for the state to spend a record $58.1 billion, which includes a proposed surplus of $6.3 billion, property tax relief and $12.1 billion for New Jersey schools.

“Our budget proposal for the next fiscal year reflects our ongoing — and unrelenting — commitment to building a New Jersey that is stronger, fairer, and more prepared for the future,” Murphy said in a statement. “Over the past seven-plus years, we have made historic progress in advancing this mission, but we’re not done yet.”

While Murphy isn’t proposing any broad tax hikes, his budget plan does include $1.2 billion in new sales taxes and fees.

Here’s a look at newly taxable activities, according to Murphy’s budget proposal:

Cigarettes: Murphy’s budget includes a $0.30 per pack increase in the cigarette tax rate from $2.70 per pack to $3.00 per pack. This increase is expected to generate an additional $41 million in revenue for FY2026.

Tobacco and Vapor Products: Beginning in FY2026, Murphy is proposing an increase in the liquid nicotine tax rate from $0.10 per mL to $0.30 per mL and the container e-liquid rate from 10 percent to 30 percent. These increases are expected to generate an additional $10 million.

the type of alcohol.

Online Gaming and Sports Betting: Murphy’s administration is proposing an increase in the internet gaming and online sports wagering tax rates from 15 percent and 13 percent, respectively, to 25 percent. This proposal is expected to generate an additional $322.6 million.

Truck Excise Fee: As a way to mitigate the impact of new warehouse development on traffic and road quality, Murphy is proposing a $2 truck traffic excise fee that would be imposed on warehouses throughout New Jersey based on the number of truck trips. This would generate $20 million in new revenue.

Drones: The FY2026 budget also includes a new excise tax on the purchase of certain unmanned aircraft systems — or drones — expected to raise $5 million.

Marijuana: The tax rate on cannabis sold by a Class 1 license holder would increase from $2.50 per ounce to $15 per ounce and also includes a new $30 per ounce tax on intoxicating hemp products, both of which are expected to generate an additional $70 million in

revenue.

Firearms and Ammunition: The budget proposal includes increases in firearm fees and new excise taxes on both firearms and ammunition, which is projected to generate $7.8 million of additional revenue.

Luxury Homes: The proposal also calls for homes and property valued between $1 million and $2 million to be assessed a 2 percent tax, up from 1 percent, and a 3 percent percent tax on property that sells above $2 million. These increases are expected to generate $317 million in revenue.

The proposal also anticipates collecting $277 million by taxing go-cart racing, laser tag, bowling, interior design services, horse training, vehicle trade-ins, some comped meals, tickets, hotel rooms, digital services and second-hand airplane sales, according to a NJ Advance Media report.

State Sen. John Burzichelli, D-Gloucester, told NJ Advance Media he was leery of the proposed tax hikes.

“The process is just beginning,” said Burzichelli, who serves on the Senate Budget and Appropriations Committee. “There’s not an appetite in my mind — I can’t speak for everyone — for new taxes. There’s just enough stress around everything that new taxes are hard to sell to anybody.”

The New Jersey Society of Certified Public Accountants also condemned the proposal, adding that new taxes would lead to higher costs for New Jersey consumers and businesses.

“The lack of affordability in New Jersey is a priority for everyone, but some of these are especially troublesome, such as taxing digital services,” the group said in a statement.

See the full 2026 budget proposal online.