APPLETON, WI (WTAQ-WLUK) — The House of Representatives passed President Donald Trump’s “big, beautiful bill” early Thursday morning, which includes a provision to eliminate tax on tips.
Details of the proposal are as follows:
- No federal income tax on tips
- Bill must be passed through the Senate
- Applies to all tips — cash or card
- Would apply from 2025-2028
About 4 million workers received tips as part of their jobs in 2023, according to the Yale Budget Lab.
Separately, the Senate passed a bill Tuesday to eliminate tax on cash tips. That bill now goes to the House and could be implemented if the larger budget bill does not pass.
Wisconsin Gov. Tony Evers expressed his desire to eliminate tax on cash tips at the state level in his budget address in February.
“I want us to work together to pass my proposal to support students and workers in our service industries, by letting them keep the tips they earn tax-free,” said Evers at the address. “Let’s eliminate taxes on cash tips.”
The politicians in Washington or Madison set the law, but they rely on donations, not tips.
Businesses in Appleton that rely on tips shared their thoughts.
“I think it benefits the people that work hard to serve you every time that you’re out to eat,” said Kendal Koch, owner of The Mad Apple Burger & Billiard Co. in Appleton, “and gives them more incentive to do that job. I think it’s a good thing.”
Koch added he’s not certain how it might impact his business or employees. It also could impact customer behavior.
“Does that mean people think because we’re not paying taxes, that they’re going to give less?” said Alicia Andrews, manager at Cleo’s Cocktail Lounge in downtown Appleton. “I’m cautiously optimistic, but always, always cautious.”
