New Jersey Governor Phil Murphy signed legislation on Monday which prohibits most stores and restaurants in the state from going cashless.
The new law takes effect immediately and would punish businesses that violate it with a fine of up to $2,500 for the first offense, $5,000 for a second offense, any subsequent offense would be unlawful practice under the state Consumer Fraud Act.
The law exempts certain sectors, like parking facilities, car rentals and airport vendors.
New Jersey is now the second state in the country to bar businesses from refusing to accept legal tender. Massachusetts passed a similar law in 1978.
The state Senate passed the bill 39-0, and the Assembly passed it 72-2.