This bill proposes to exclude tips from the calculation of gross income for state income tax purposes in New Jersey. Currently, gross income includes various forms of remuneration such as salaries, wages, and tips. The bill amends N.J.S.54A:5-1 by deleting the reference to tips as part of gross income and introduces new language in N.J.S.54A:6-5, stating that tips received for services rendered will be treated as property acquired by gift, thereby exempting them from gross income tax.

The legislation aims to provide tax relief to individuals who earn tips, aligning their treatment with that of gifts and inheritances, which are also excluded from gross income. This change is intended to take effect immediately and will apply to taxable years beginning on or after January 1 of the year following the enactment of the bill.

Statutes affected:
Introduced: 54A:5-19