New Jersey Senator Vince Polistina has introduced legislation to eliminate taxes on tips. This measure would exempt tips from the state’s gross income tax. The bill, S-3741, would allow workers in tip-based jobs to exclude their tips from taxable income. This will provide them with much-needed financial relief.
“Taxing tips takes credit for someone else’s hard work. These gratuities reward excellent customer service, and workers deserve to keep their earnings without the government taking a cut,” Polistina said. He emphasized the crucial role of the service industry in New Jersey’s economy. Particularly in areas like Atlantic City, where tourism and hospitality drive local business.
Under current New Jersey law, tips are classified as taxable income. This policy places a financial burden on workers whose base wages often do not cover living expenses. Polistina’s bill specifically targets those in service roles. This includes restaurant servers, bartenders, casino dealers, hotel staff, hairdressers, barbers, and food delivery workers. The bill aims to eliminate taxes on tips, helping workers retain a larger portion of their earnings by allowing them to exclude tips from their taxable income.
“This legislation eases the financial burden for many service industry workers in New Jersey,” Polistina stated. He pointed out that the ongoing discussion around this issue has gained traction in several other states, which are pursuing similar measures to provide tax relief to service workers.
Polistina called for bipartisan support for the bill. He stated, “This should be a bipartisan issue, providing direct relief to hard working citizens.”
The bill now moves to committee for further review, with the potential to benefit thousands of service industry workers across New Jersey who rely on tips to supplement their income.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.