Polistina Introduces Bill to Eliminate Taxes on Tips

October 3, 2024

Senator Vince Polistina (R-2) introduced legislation that would exempt tips from being taxed under New Jersey’s gross income tax.

“Taxing tips is like taking credit for someone else’s hard work. These gratuities are a reward for excellent customer service, and workers deserve to keep their earnings without the government taking a cut,” said Sen. Polistina. “This is a common sense, pro-worker bill that will support our service industry, which is the backbone of Atlantic City and vital to many other communities across New Jersey.”

Currently, tips are considered taxable income under state law. Senator Polistina’s bill, S-3741, would remove tips from the list of taxable income categories.

Many employees who work in the service industry rely on tips to supplement their income, as base wages alone often do not cover living expenses, this includes:

• Restaurant servers
• Bartenders
• Casino dealers
• Hotel staff
• Hairdressers and barbers
• Food delivery workers, and more

“At the core of this legislation is easing the financial burden for many of the service industry workers who call New Jersey home,” Sen. Polistina concluded. “We have seen this topic discussed on a national platform as multiple states are pursuing similar legislation. This should be a bi-partisan issue supported by all to provide direct relief to some of our hardest working citizens.”

You can read a draft of the legislation online.