News release
Sen. Suzette Martinez Valladares, R-Acton, applauded members of the U.S. Senate for the bipartisan, unanimous passage of the federal “No Tax on Tips Act,” while also pushing for passage of her similar bill winding its way through the state legislative process.
The federal bill, which would create a tax deduction worth up to $25,000 for tips, passed the U.S. Senate with no opposition and now moves to the U.S. House for consideration.
On the first day of California’s current legislative session, Valladares joined with Sen. Rosilicie Ochoa Bogh, R-Yucaipa, and Sen. Shannon Grove, R-Bakersfield, to introduce Senate Bill 17, the California “No Tax on Tips” bill.
SB 17 passed the Senate Revenue and Taxation Committee in April and awaits approval from the Senate Appropriations Committee.
“I am encouraged to see that our leaders in the U.S. Senate came together in a bipartisan way to pass this important legislation,” Valladares said in a news release. “The affordability crisis is putting a strain on millions of Californians and it’s time to provide some needed relief, especially for those in the service sector who rely heavily on tips to make ends meet. I was a server as a young adult, and I know firsthand what a huge difference this would make in the lives of millions of hardworking Californians who are feeling the strain of the high cost of living.”
The release said SB 17 would do the following:
• Allow taxpayers to deduct up to $20,000 of their tipped income.
• Allow taxpayers to claim a deduction if they have an adjusted gross income below a specified threshold: $125,000 for individual returns and $250,000 for joint returns.
• Change the definition of tips to conform to the federal definition.
• Exclude from the definition of “tipped employee” any taxpayer holding a professional license issued by the Department of Consumer Affairs, except for Barbering and Cosmetology.
“I look forward to continuing to work with my colleagues in the Legislature to support ‘No Tax on Tips,’ and I’m hopeful that both the federal and state versions will become law, allowing workers to keep more of their hard-earned money,” Valladares added.
