Nevadans Move Closer to ‘No Tax on Tips’ as Bill Advances in U.S. Senate
Legislation Passes with Unanimous Bipartisan Support
LAS VEGAS (KTNV) — A significant legislative step has been taken for Nevadans as the No Tax on Tips Act has successfully passed through the U.S. Senate with unanimous bipartisan support. Originally touted by former President Donald Trump during his campaign, this bill now heads to the House of Representatives for further consideration. If enacted, it would exempt tipped workers’ wages from federal income tax, potentially benefiting countless employees in Nevada’s robust service industry.
What the Bill Entails
The No Tax on Tips Act aims to allow "qualified tips" received by workers to be deducted from federal income tax, with total deductions capped at $25,000 for each taxable year. A “qualified tip” includes any cash tip received by an employee in industries where tipping is customary, particularly in sectors such as food service and beauty services. The legislation defines "cash tips" to encompass physical cash, as well as tips received through credit and debit card payments and checks.
If the bill is signed into law, the Treasury Secretary will be required to provide a list of occupations that traditionally receive tips within 90 days, and the measures would take effect for all taxable years beginning after December 31, 2024. ### Political Reactions and Support
This legislation reflects a significant promise made by Trump during his campaign, which he emphasized could have contributed to his electoral success in Nevada. Trump’s resolve was reaffirmed when he returned to Las Vegas in January to advocate for the bill further. Despite its broad support, some federal budget experts express concerns regarding the potential cost of the policy, estimating that it could result in a revenue loss of over $118 billion for the federal treasury over the next decade.
Key supporters of the bill from both parties have expressed a commitment to improving the lives of Nevada’s workers. Senators Jacky Rosen (D-Nev.) and Catherine Cortez Masto (D-Nev.), who are both cosponsors of the bill, have highlighted how the tax exemption would significantly benefit the state, which has the highest concentration of tipped workers in the nation.
On the Senate floor, Rosen emphasized the bipartisan support for the legislation: “No Tax on Tips was one of President Trump’s key promises to the American people… This bipartisan bill is a good idea. It has support from Democrats and Republicans, so we should pass it… as soon as possible."
Cortez Masto echoed her colleague’s sentiments, stating, “I’m pleased that my bipartisan bill to put more money in the pockets of hardworking Nevadans has passed the Senate. Tipped workers are the backbone of Nevada’s economy, and with prices skyrocketing, working families deserve this break.”
Opposition within the House
While the Senate version of the bill has drawn support, there is an alternative proposition born from the House Republicans’ expansive budget plan. This competing proposal introduces more stringent limitations, including provisions that could restrict eligible employees and impose a limited deduction timeframe. This has drawn criticism from advocates who argue that such stipulations do not adequately protect the interests of working families.
Ted Pappageorge, Secretary-Treasurer of the Culinary Union—the largest union representing tipped workers in Las Vegas—applauded the Senate’s passage of the No Tax on Tips Act. He urged House representatives to act decisively to finalize the legislation for the benefit of the state’s working families.
Moving Forward
As the No Tax on Tips Act moves to the House for further deliberation, its potential impact on the livelihoods of Nevada’s workers remains a crucial topic. With strong backing from both sides of the aisle, there is hope among advocates that this much-needed financial relief for tipped workers will soon become law.
As discussions continue, stakeholders will keep a vigilant eye on the progress of this significant bill aimed at redefining tax responsibilities for tipped workers across the nation.
Share this article:
