U.S. Senator Ted Cruz has introduced the No Tax on Tips Act, a bipartisan effort aimed at exempting tips from federal income tax. This legislative move is backed by several senators, including Rick Scott, Jacky Rosen, Catherine Cortez Masto, Steve Daines, Pete Ricketts, and Kevin Cramer. The companion bill in the House of Representatives was introduced by Representatives Vern Buchanan and Byron Donalds.
Senator Cruz stated, “American workers in many industries rely on tipped wages to make ends meet. Today, I’m introducing my bipartisan No Tax on Tips Act—legislation I authored to fulfill President Trump’s promise to end the wrongful practice of taxing voluntary tips.”
Senator Rosen emphasized the significance for Nevada’s service workers: “Nevada’s service and hospitality workers are the backbone of our economy, and they deserve financial relief at a time when they are getting squeezed by rising costs.”
Echoing this sentiment, Senator Cortez Masto said, “Working families in Nevada deserve a break, and this bipartisan bill will put more money in their pockets.”
Senator Daines highlighted economic concerns: “Hard-working Montanans have been hit hard with Biden’s inflation… ‘No Tax on Tips’ will bolster the workforce.”
Representative Buchanan noted Florida’s reliance on tipped wages: “Florida’s tourism-driven economy thrives because of the hardworking men and women in our restaurant and hospitality industries.”
Representative Donalds criticized Washington’s fiscal policies: “For far-too-long, Washington’s focus has been on how much of your paycheck politicians and unelected bureaucrats will take.”
Support for the bill also came from industry leaders like Sean Kennedy from the National Restaurant Association who remarked that it “would put cash back in the pocket of a significant number of workers.” Nina Daily from the Professional Beauty Association appreciated efforts to support beauty professionals as well. Michael Layman from the International Franchise Association supported it for benefiting small business owners.
The proposed legislation seeks to allow taxpayers to claim a 100% deduction for tipped wages during tax filing. It includes measures to ensure only traditionally tipped employees benefit.
Senator Cruz has been an advocate for keeping taxes low since his involvement in historic tax reform efforts in 2017.
