Wednesday, Senator Suzette Martinez Valladares, R-Santa Clarita, applauded members of the U.S. Senate for the bipartisan, unanimous passage of the federal “No Tax on Tips Act.”

The bill, which would create a tax deduction worth up to $25k for tips, passed the Senate with no opposition and now moves to the U.S. House for consideration, according to Valladares.

On the first day of California’s current legislative session, Senator Valladares joined with Senator Rosilicie Ochoa Bogh R-Yucaipa and Senator Shannon Grove R-Bakersfield to introduce SB 17, the California “No Tax on Tips” bill, which continues to make its way through California’s legislative process. 

“I am encouraged to see that our leaders in the U.S. Senate came together in a bipartisan way to pass this important legislation,” said Senator Valladares. “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.”

California Senate Bill 17, the “No Tax on Tips” bill 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; 
• and 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,” Senator Valladares concluded.

Ed. Note: The above information was provided to KHTS by Valladares’ Office.

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