Nevadans inching toward ‘No Tax on Tips’ as bill moves through US Senate with unanimous, bipartisan backing

Tax Exemption on Tips Bill Advances in Senate

LAS VEGAS – A significant campaign promise from former President Donald Trump appears to be gaining traction in Nevada. The proposed tax law concerning tips has received unanimous, bipartisan approval in the US Senate.

Now, the bill is set for further consideration. If enacted, it would exempt certain workers from federal income taxes on their tips.

Details of the Bill

The legislation allows for “qualifying tips” to be deducted from federal income tax, with a maximum deduction limit of $25,000 each tax year. The bill defines qualified tips primarily as cash received by workers in industries like food service and beauty, offering some specific allowances for these occupations.

According to the bill, “cash tips” encompass physical currency as well as tips received via credit and debit card transactions.

If the bill becomes law, the Treasury Secretary will have a 90-day period to compile a list of jobs that traditionally receive tips before the year’s end on December 31, 2023. This legislation would take effect for all taxable years starting on or after December 31, 2024.

Political Reactions

The “no tax on tips” initiative is often cited as a key factor in Trump’s Nevada success. He reinforced his commitment to this promise during a return visit to Las Vegas in January. However, some federal budget analysts express concern that the policy could cost the Treasury around $118 billion over the next decade.

Yet, both Democrats and Republicans voiced their support during the bill’s introduction, including former presidential candidate and vice president Kamala Harris. The bill was initially put forward by Senator Ted Cruz (R-Texas).

Co-sponsors Senators Jackie Rosen (D-Nev.) and Katherine Cortez Masto (D-Nev.) believe that the tax exemptions could significantly benefit many Nevadans, especially given that their state has the highest concentration of workers in this sector.

On Tuesday, Senator Rosen spoke on the Senate floor, urging swift passage of the bill. She emphasized, “The ‘tax on tips’ was an important promise from President Trump that I stand behind, regardless of its source.” She continued, stating the need for action, adding that this bipartisan legislation is a positive step forward that should proceed without delay.

Senator Cortez Masto expressed her willingness to collaborate on efforts that improve the lives of Nevadans. She noted her relief that the bipartisan bill had passed, which would allow more funds to stay in the pockets of hardworking individuals. She criticized the negative implications of certain Republican stances that might hinder healthcare for the very families they aim to support.

There’s also mention of another related bill framed as a “big beautiful bill,” which includes a “no tax on tips” component. This legislation, recently passed in a committee vote, addresses federal budget spending but contains provisions that could limit benefits for higher-earning employees.

Ted Pappageorge, secretary accountant for the Culinary Union, the largest union representing thousands of Las Vegas workers, commended the Senate’s passage of the no tax on tips initiative, describing it as vital for labor families.