‘No Tax on Tips’ Act passes U.S. Senate at Nevada senator’s request

The U.S. Senate passed the No Tax on Tips Act on Tuesday at the request of Sen. Jacky Rosen. Rosen, D-Nev., asked the Senate to pass the bill by unanimous consent Tuesday afternoon.

The No Tax on Tips Act — introduced by Rosen, Sen. Ted Cruz, R-Tex., Sen. Catherine Cortez Masto and others — would eliminate federal income taxes on tipped wages for service and hospitality workers, Rosen said on the Senate floor.

“Tips aren’t extra,” she said. “It’s part of their income that they use to make ends meet. Tips are how Nevadans pay their rent, cover their groceries, take care of their families, their kids, and Nevada has more tipped workers per capita than any other state, so this bill would mean immediate financial relief for countless hard working families.”

President Donald Trump first proposed the idea while on the campaign trail in Las Vegas, where many residents depend on tips. Nevada elected officials on both sides of the aisle quickly jumped on board, proposing their own bills.

“I am not afraid to embrace a good idea, wherever it comes from,” Rosen said. “It’s not a time for politics; it’s a time for progress for hard working Americans.

No tax on tips is also in the House GOP reconciliation package, but it would expire after four years if passed. The Senate bill passed Tuesday would make the tip exemption permanent.

Rosen, Cortez Masto and Cruz’ bill will establish a new tax deduction of up to $25,000 for tips. It would be limited to cash tips received by and reported by the employee to the employer for purposes of withholding payroll taxes. Under current law, an employee is required to report tips exceeding $20 per month. The tax deduction also would not apply to an employee who made more than $160,000.

“One way or another, ‘no tax on tips’ is going to become law and give real relief to hard working Americans,” Cruz said on the Senate floor. “So I’m proud of what the Senate just did, and I commend Democrats and Republicans, even in a time of partisan division, for coming together and agreeing on this common sense policy. I think that’s terrific for workers in all 50 states.”

Cortez Masto celebrated the approval Tuesday afternoon.

“I’m happy to work with anyone on legislation that’s going to improve Nevadans’ lives, and I’m pleased that my bipartisan bill to put more money in the pockets of hardworking Nevadans has passed the Senate,” Nevada’s senior senator said in a statement. “Tipped workers are the backbone of Nevada’s economy, and with prices skyrocketing, working families deserve this break.”

Contact Jessica Hill at jehill@reviewjournal.com. Follow @jess_hillyeah on X.