(The Center Square) – Arizona legislation to end state income taxation of tips advanced out of the House Ways and Means Committee.
“I worked in the service industry years ago and understand the challenges tipped employees face,” state Rep. Gail Griffin, R-Hereford, said in a statement.
“Tips are an expression of appreciation from customers for services provided. Tips are gifts and, in my opinion, should not be taxed. HB2081 ensures that Arizonans who rely on tips to support themselves and their families can keep more of their hard-earned money. I’m grateful to Chairman Olson for making this the committee’s first bill for the session,” she continued.
During the meeting, committee Chairman Justin Olson passed an amendment to get rid of the term “cash” in House Bill 2081.
The legislation is intended to mirror a campaign promise made by President Donald Trump to allow the tax exemption on a federal level.
All Republicans on the committee voted in favor, whereas Democrats voted against it. Rep. Seth Blattman, D-Mesa, noted that he would potentially support the bill if it had an income cap amendment to “make up for the revenue” that could be lost with the subtraction.
“Hopefully we’ll have a conversation about an amendment that would put a cap on this to make sure that it’s really targeted at the lower end of the income spectrum and not being, you know, potentially abused by others,” he said in the committee meeting.
