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Bill > S1877
NJ S1877
NJ S1877Provides tax credits to restaurant owners to offset increase in State minimum wage rate.
summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill allows corporation business tax (CBT) credits and gross income tax (GIT) credits for restaurant owners to offset the increased State minimum wage. The bill provides a tax credit equal to: (1) the minimum wage rate required to be paid to an employee multiplied by the number of hours worked by an employee during a tax year; minus (2) the minimum wage rate required to be paid on the day prior to the enactment of the 2019 changes to the minimum wage law, factoring in any otherwise required adjustments to the minimum wage rate, such as for inflation. In the case of an employee who customarily and regularly receives gratuities or tips, the credit will be $3.00 multiplied by the number of hours worked by the employee during. Employees that are employed for deliveries will not be counted in the calculation of the credit. The bill restricts the number of employees that can be used in calculating the tax credit amount, caps the credit amount at $12,500 for each employee included in the calculation of the credit, and limits the credit's availability to the 10 years immediately following the effective date of the bill. A taxpayer will be allowed to claim a credit for no more than three restaurant locations, and the credit will only be available to a taxpayer with five or fewer restaurants.
AI Summary
This bill provides tax credits to restaurant owners to help offset the increased costs associated with a higher state minimum wage, specifically by offering credits against both corporation business tax (CBT) and gross income tax (GIT). The credit is calculated based on the difference between the new minimum wage rate and the rate in effect before the 2019 minimum wage law changes, multiplied by the hours worked by each employee, with a special rate for tipped employees and excluding delivery personnel. There are limitations on the credit, including a cap of $12,500 per employee, a restriction on using more employees than were employed before the 2019 law change, a limit to three restaurant locations, and eligibility only for taxpayers with five or fewer restaurants. The credit is available for ten years following the bill's enactment and cannot be claimed for costs already covered by other tax credits or incentives.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/13/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/S1877 |
| BillText | https://pub.njleg.gov/Bills/2026/S2000/1877_I1.HTM |
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