The U.S. Senate, including Hawaii senators Mazie Hirono and Brian Schatz, unanimously voted in support of a measure that will eliminate federal income taxes on tipped wages.
President Donald Trump has repeatedly promised a tax cut on tipped wages as part of “one big beautiful bill” that would enact a broad range of policy changes across all sectors of government.
The “No Tax on Tips Act” is not part of that bill, but rather a separate, bipartisan bill, that would enact changes largely similar to Trump’s proposed tipped wage tax policy without getting into the vast number of other proposals in his Big Beautiful Bill, a more than 1,000-page omnibus that House committees are trying to push forward.
As written, the No Tax on Tips Act establishes a tax deduction of up to $25,000 for tips. That deduction would be limited to cash tips received by an employee “during the course of employment in an occupation that customarily receives tips” and are reported to the employer for tax withholding purposes.
Employees who make more than $160,000 per year would also be barred from the deduction.
Nevada Sen. Jacky Rosen (D) introduced the bill to the Senate Tuesday, saying she is “not afraid to embrace a good idea wherever it comes from.”
The Senate voted to pass the bill with unanimous consent.
Similarly uncontroversial were two other bills in the Senate Tuesday, the Save Our Seas 2.0 Act and the Securing Semiconductor Supply Chains Act.
The former makes fairly granular language changes to the National Oceanic and Atmospheric Administration’s Marine Debris Program, while the latter requires the Department of Commerce to develop plans to increase foreign investment in semiconductor-related production. Both bills also passed unanimously.
All three bills must now pass the House.
