Arizona House advances state’s own ‘no tax on tips’ bill – Washington Examiner
Teh Arizona House of Representatives is advancing House Bill 2081, which aims to exempt tips from state taxation, following president Donald Trump’s campaign promise to eliminate taxes on tips. The bill has passed through the House Committee on Ways and Means and will soon be reviewed by the Rules Committee before heading to the Arizona Senate. the bill’s sponsor, Republican state Rep. Gail Griffin, argues that tips should be considered gifts and not subject to taxation, allowing workers who depend on tips to retain more of thier earnings.
The proposal received support exclusively from Republicans, while Democrats opposed it, although some expressed willingness to support it if an income cap amendment were included to limit benefits to lower-income earners. this initiative aligns with the Republican 2025 House Majority Plan aimed at tax reduction to stimulate the economy, reflecting a widespread concern among Arizona voters about high state taxes and inflation. Arizona currently ranks as the 10th lowest state tax burden in the country. The bill resonates with Trump’s previous advocacy for tax reforms benefiting tipped employees during his campaign.
Arizona House advances state’s own ‘no tax on tips’ bill
The Arizona House of Representatives moved forward with its own version of President Donald Trump’s “no tax on tips” campaign promise.
Arizona House Bill 2081 proposes a tax exemption on tipped wages in the state. It passed through the House Committee on Ways and Means and will now need to pass the Rules Committee before being moved to the Arizona Senate.
“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,” the bill’s sponsor, Republican state Rep. Gail Griffin, said in a statement.
The measure passed along party lines, with all Republicans voting for it and Democrats voting against it. Democratic state Rep. Seth Blattman did note that he could support the bill if it included an income cap amendment to “make up for the revenue” that could be lost with the exemption.
“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.
The measure is part of the state’s Republican 2025 House Majority Plan to decrease taxes and help boost the state economy. According to the Republican website, 73% of Arizona voters feel state taxes are too high, and another 94% are worried about inflation.
Arizona has the 10th lowest tax burden in the country, according to U.S. News & World Report.
The state-level proposal mirrors a loose proposal Trump repeatedly made on the campaign trail to give tipped employees a tax exemption on their tips.
“Hotel workers and people that get tips, you’re going to be very happy because when I get to office, we are going to not charge taxes on tips,” Trump said at a campaign event in Nevada last year. “We’re going to do that right away, first thing in office.”
Trump briefly mentioned it again on Inauguration Day in reference to winning Nevada, a state in which many work in the service and hospitality industry and rely on tips.
“Can you remember that little statement about tips?” the president asked during one of several Inauguration Day speeches. “Anybody remember that little statement? I think we won Nevada because of that statement.”
Trump also promised “no tax on overtime” but has not revisited that proposal since the election.
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