Madison, WI — Representative Ron Tusler (R-Harrison) issued the following statement after the Wisconsin Assembly passed Assembly Bill 38 to exempt tipped earnings from state income taxes:
“A tip is a gift. Tips are not guaranteed salary. The government should not have its hands on something that is voluntary. Because tips are not mandatory, if a server does not receive a tip, they cannot claim that you stole their service. Just as the government cannot tax your Christmas gifts after you receive them, it should not tax your tips.”
“Assembly Bill 38 is a bill to help mostly working and middle-class people. The biggest tax on the working and middle-class is inflation. The Biden Administration, due to its reckless spending, added trillions of dollars to our national deficit and increased prices more than any other president since Jimmy Carter. The working class needs tax relief!”
Assembly Bill 38 would exempt tips from state income tax to mirror the federal tax exemption recently adopted. Both cash tips and tips received via credit card in an amount up to $25,000 would be exempt for taxable years 2025 to 2028. The exemption would be phased out if federal adjusted gross income rises above $150,000 for an individual taxpayer and $300,000 for joint filers.
“Additionally, tips are a tax on the honest. We do not have effective ways of enforcing taxes on tips, so why punish the honest workers who report their tips? And because we have no effective way to enforce taxes on tips, only 1/70th of our state income tax, and 1/370th of our state budget comes from taxes on tips. Eliminating taxes on tips at the state and federal level is a simple way we can help give the working class some much-needed relief. I encourage the Senate to pass the companion, Senate Bill 36, and I also encourage Governor Evers to stay true to his pre-session priorities by signing no tax on tips into law.” Representative Ron Tusler is a lifelong resident of the Fox Valley who is committed to fiscal responsibility, lower taxes, supporting working families, and fighting for policies that put more money back in the pockets of everyday Wisconsinites and reduce government burdens and overreach.
