TRENTON, N.J. – A plan to exempt service workers’ tips from New Jersey’s income tax has stalled in Trenton, ending the legislative session without a vote as lawmakers shifted focus to other policy priorities.
The proposal, Senate Bill 3741 — known as the “No Tax on Tips” bill — would have excluded gratuities from the state’s gross income tax, offering relief to waiters, bartenders, and other service workers who rely heavily on tip income. Despite bipartisan sponsorship and early support from small business groups, the measure never advanced to the floor before the legislature adjourned.
Republican Assemblywoman Dawn Fantasia called the bill “dead in the water,” criticizing the Democrat-led majority for “ignoring the working-class people who depend on tips to survive.”
Introduced in October 2024 by Sen. Vincent Polistina (R-Atlantic) and co-sponsored by Sens. Brandon Tiver and Nicholas Amato, the measure sought to reclassify tips as “property acquired by gift,” making them exempt from state taxation. Supporters argued the proposal would mirror federal discussions to protect tip income and provide targeted relief for hospitality workers still recovering from post-pandemic economic challenges.
The bill’s progress stalled amid a busy final session dominated by environmental legislation, affordable housing initiatives, and expanded labor rules. With the legislative calendar closed, S3741 expires and must be reintroduced in the next session to be reconsidered.
“The decision not to move forward sends a clear message that Trenton isn’t listening to the people actually serving tables and pouring drinks every night,” Fantasia said in a statement.
The bill’s failure marks a setback for Republicans, who had promoted it as a simple, bipartisan form of tax relief for New Jersey’s service industry workforce.
New Jersey’s “No Tax on Tips” bill failed to advance before adjournment, ending the session without action on proposed tax relief for tipped workers.
