Senate passes bill that eliminates taxes on tips

The Senate unanimously passed the No Tax on Tips Act on Wednesday, offering deductions of up to $25,000 for workers’ cash tips. The House will get to decide on the legislation now.

It was sponsored by Republican Sen. Ted Cruz and supported by a bipartisan group, including Nevada Democrats Jacky Rosen and Catherine Cortez Masto.

The bill was one of President Donald Trump’s 2024 campaign promises and had widely received bipartisan support. However, it is limited to tipped workers making less than $160,000 this year. This cap can rise with inflation.

According to Sen. Rosen, Nevada has the highest number of tipped workers per capita and could see significant benefits.

However, critics argue that the bill may offer little help to low-income workers who often don’t owe income taxes. They say it would encourage employers to pay lower hourly wages to tipped staff, which is already at $2.13 in some states.