Every few months someone asks me about the "New Jersey Exit Tax." Now, NJ has many, often exorbitant taxes, but for most people, there is no "exit tax." Homeowners who live in NJ and are selling their primary residence to move out of state are not obligated to pay a special fee to do so.
There are cases where an out-of-state NJ property owner may have money escrowed at closing to cover any state taxes they might have incurred when they sell their NJ investment property. They need to talk with their tax adviser.
March 25, 2008 Update - Since I first published this report, it has become apparent that the State of New Jersey is becoming a bit aggressive on this issue, to the point that people who close on the sale of their home in NJ and no longer have a NJ address may be liable for the withholding noted above. However, attorneys in NJ are saying that if the gain in value of the property is within the Federal limits of $250,000 for a single person or $500,000 for a married couple, they would not be obligated to withhold funds for payment. No Federal gain, no New Jersey gain, they tell me.
But, be sure to check with your tax adviser on this point.