They appear to be. I suggest calling Vanguard to double check.
Capital gains are exempt from New Jersey income tax if they are from a New Jersey qualified investment fund. A qualified investment fund must:
- Be a regulated investment company;
- Invest 80% or more of its funds (other than cash or receivables) in securities that are exempt from New Jersey Income Tax; and
- Complete and retain Form IF-1, Certification of Qualified Investment Fund, to document its status. This certification does not need to be filed with us, but must be made available upon request.
Fund (VNJUX) exempt from New Jersey taxes ?"
Capital gains from fund trading or redemption of shares is not tax exempt federally. Here is a link to the applicable Vanguard page. See the notes at the bottom of the page.
Backed up the IRS publication here. Capital gains for the sale are taxable interest and dividends earned are not.
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