A New Jersey state senator has introduced legislation exempting tips from being taxed under New Jersey’s gross income tax.
Currently, tips are considered taxable income under state law. Under S-3741, introduced by Republican Sen. Vince Polistina, tips would be removed from the list of taxable income categories.
“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,” Polistina said in a release. “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.”
Former President Donald Trump, the Republican candidate in this year’s presidential election, has proposed the same concept at the federal level. Many employees in the service industry, including restaurant servers, bartenders, casino dealers, hotel staff, food delivery workers, hairdressers, and barbers, rely on tips to supplement their income, as base wages alone often do not cover living expenses.
“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.”
