He also wants to increase the state's contributions to public education by about 8 percent, or $1 billion.
The first-term Democratic governor is announcing those proposals Tuesday in his first budget address to the Democrat-led Legislature.
Murphy wants to raise the sales tax from 6.625 percent to 7 percent and include ride-sharing services and accommodations like Airbnb.
Under his budget plan, incomes over $1 million would be taxed at 10.75 percent, up from the top bracket of 8.97 percent.
His proposed spending plan of $37.4 billion is roughly 5 percent higher than former Republican Gov. Chris Christie's final-year proposal.
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