The plan to end taxes on tips in Wisconsin is headed for a vote, eventually.
The state’s No Tax On Tips legislation cleared the Assembly Committee on Ways and Means Thursday.
The legislation, Assembly Bill 38, would end the state income tax on qualified tips.
Sen. Andre Jacque, R-New Franken, helped write the plan.
“Tax relief provided by AB 38 will help high school students, young adults working their way through college, parents from single income homes and many others among Wisconsin’s working class who depend upon income they receive from tips in exchange for excellent service,” Jacque said in a statement.
Jacque and state Rep. Ron Tusler, R-Harrison, have been pushing similar No Tax On Tips plans for years, but the proposal took-off when President Trump made no tax on tips part of his economic message.
Gov. Evers included a tip tax exemption in the new state budget, but Jacque and Tusler said “due to timing it became necessary to pass the change as a stand-alone bill to ensure it would mirror federal policy.”
The legislation now ends taxes on the first $25,000 of tipped income, and has a phase-out for people who earn more.
“Eliminating taxes on tips has broad bi-partisan support,” Jacque added.
The legislation now heads for a vote in the Wisconsin Assembly. If it passes there, and passes in the State Senate, it would then head to Gov. Evers’ desk for his signature.
This article was originally published with The MacIver Institute.