Austin News

U.S. Sen. Ted Cruz (R-Texas) introduced the No Tax on Tips Act, a legislative proposal aimed at exempting tips from federal income tax. The bill is co-sponsored by Sens. Steve Daines (R-Mont.), Rick Scott (R-Fla.), and Kevin Cramer (R-N.D.). Industry groups, including the National Restaurant Association, have expressed support for the initiative.

"American workers in dozens of industries depend on tipped wages to support themselves," said Sen. Cruz. "Today, I am introducing pro-worker legislation, the No Tax on Tips Act, to ensure they get to keep all of those tips. This legislation is a common-sense pro-worker bill that will help families deal with the historic inflation caused by the Biden administration."

Sen. Daines remarked, "Joe Biden’s sky-high inflation has hit hardworking Americans especially hard. Providing a much-needed tax cut for working families will help offset Biden’s high prices and get people back in the workforce."

Sen. Cramer added, "President Trump is right: tips are earned by providing good service. It is simpler and more fair to let these workers keep the reward they earned rather than send it to D.C. bureaucrats. I am pleased to join Senator Cruz as a co-sponsor of the No Tax on Tips Act."

Sen. Rick Scott stated, "Under Biden’s administration, families are struggling to make ends meet with 20% inflation and policies that make their lives harder. We need to take action now to lower costs for hardworking Americans and get our economy back on track."

Sean Kennedy, Executive Vice President of Public Affairs at the National Restaurant Association, commented, "Tipped employees are a critical part of the restaurant industry, and anything that strengthens their economic condition is a positive for them." He noted that this act would provide immediate tax relief for over 2.2 million restaurant employees.

Myra Reddy, Director of Government Affairs at the Professional Beauty Association (PBA), expressed gratitude towards Senators Cruz, Scott, Cramer and colleagues for recognizing professionals in beauty and barber shops as part of this initiative.

Emily Williams Knight, President and CEO of Texas Restaurant Association (TRA), praised Sen. Cruz's efforts: “The Texas Restaurant Association is grateful to Sen. Cruz for working with us to develop the ‘No Tax on Tips Act.’”

The bill proposes exempting cash tips—including cash, credit and debit card charges—from federal income tax by allowing taxpayers to claim a 100% above-the-line deduction for tipped wages.