Lawmakers are proposing a change to state statutes that would allow cash tips to be kept by workers, tax free.
The bill, currently being circulated for sponsors was authored by Republican State Senator Andre Jacque of De Pere and Republican Representative Cody Horlacher of Mukwonago.
“It is going to provide one less fiscal constraint for low income workers in many cases,” Jacque said.
The proposal would allow workers to keep their cash tips unreported on their state income tax returns. The amount would still be required to be entered on federal returns however.
“This really deals with the reality that cash tips are already underreported in our income system,” Jacque said.
Bartender Melissa Aderhold at Steny’s in Milwaukee’s Walker’s Point says tips are a big part of the service industry income.
“We do have a substantial amount of tips that are taxed with the percentage of credit card tips versus cash tips,” she said.
If approved, Jacque says Wisconsin would likely be the first in the nation to pass such a law. He is confident the bill will find bi-partisan support and then head to a committee before a full vote in both houses of legislature.