News release
State Sen. Suzette Martinez Valladares, R-Santa Clarita, announced that she introduced legislation alongside Sen. Rosilicie Ochoa Bogh, R-Yucaipa, and Sen. Shannon Grove, R-Bakersfield, to exempt tips from state income tax.
The bill, introduced on the first day of the legislative session, would provide immediate relief for California’s service and hospitality workers, given the cost of living increases in recent years, according to a news release from Valladares’ office.
“During my 20s, I was a struggling student working as a waiter to make ends meet. I know firsthand how hard service workers hustle every day,” Valladares said in the release. “Hardworking employees in the service industry deserve to keep more of what they earn – it’s time to ease their tax burden and help them get ahead.”
Everyday essentials like groceries and utilities cost significantly more today than ever before – stretching most households thin. With millions working jobs that receive tips, this bill, Senate Bill 17, would offer back some affordability to our dedicated service and hospitality workers, the release said.
“Members of my family, including my mom as a single mother, have lived the daily struggles of working in the service industry,” Bogh said in the release. “Tips aren’t regular income, yet they’re taxed as if they are. They’re not guaranteed, they’re not consistent, and they’re rarely enough to make ends meet. It’s time for California to provide relief to these hardworking individuals.”
The new policy would ensure every dollar left as a tip directly goes into the pockets of those who earned it, the release said, adding that more money in the hands of everyday consumers will have a positive effect on their communities, helping small businesses.
“I am incredibly proud to joint author this legislation to help struggling workers keep more of their earnings. By not taxing tips, it will allow those who work in the service industry, from wait staff, to delivery and ride-share drivers, to keep the extra gratuity given to them for excellent service,” Grove said in the release. “When we make the service economy more prosperous, it will only further boost our local economy and attract more people into the workforce.”
