LAS VEGAS (KTNV) — The No Tax on Tips Act, one of President Donald Trump's campaign promises in Nevada, has passed through the U.S. Senate with unanimous bipartisan support.
The bill now heads to the House for further consideration. If signed into law, the bill would exempt workers' tipped wages from federal income tax.
WATCH | Guy Tannenbaum explains what this bill would mean for Nevadans
What does this bill do?
The bill states that "qualified tips" can be deducted from federal income tax. The deduction cannot exceed $25,000 for each taxable year.
A qualified tip, as defined by the bill, is any cash tip received by a worker in an industry that normally receives tips, with special considerations for occupations in the food and beverage and beauty service industries.
It's important to note, lawmakers said "cash tips" can mean physical notes and coins, credit and debit card charges, and checks.
If the bill is signed into law, the Treasury Secretary has 90 days to submit a list to lawmakers of occupations that traditionally received tips on or before Dec. 31, 2023.
The bill would apply to all taxable years beginning after Dec. 31, 2024.
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Political response
The "No Tax on Tips" policy was the reason Trump said he won Nevada. After winning the election, Trump doubled down on his promise by returning to Las Vegas in January to tout the policy further. There are federal budget hawks posing opposition, though, saying the policy could cost the treasury upwards of $118 billion over the next decade.
WATCH | Trump's "No Tax on Tips" rally in Las Vegas back in January
Still, Democrats and Republicans alike expressed their support for the idea when it was originally introduced on Trump's campaign trail in Las Vegas — including former presidential candidate and Vice President Kamala Harris. The bill was originally sponsored by Sen. Ted Cruz (R-Texas).
Senators Jacky Rosen (D-Nev.) and Catherine Cortez Masto (D-Nev.) — both cosponsors of the bill — said the tax exemption will greatly improve the lives of many Nevadans, citing that our state has the highest concentration of tipped workers in the nation.
On Tuesday, Rosen delivered remarks on the Senate floor, pushing her colleagues to pass the bill.
"'No Tax on Tips' was one of President Trump’s key promises to the American people, which he unveiled in my state of Nevada. And, I am not afraid to embrace a good idea, wherever it comes from," Rosen said.
"So I agreed we need to get this done. It’s not a time for politics, it’s a time for progress for hard-working Americans. This bipartisan bill is a good idea. It has support from Democrats and Republicans, so we should pass it, well, as soon as possible, without any poison pills."
WATCH | Sen. Jacky Rosen's full remarks on the Senate floor
Sen. Cortez Masto also released a statement:
“I’m happy to work with anyone on legislation that’s going to improve Nevadans’ lives, and I’m pleased that my bipartisan bill to put more money in the pockets of hardworking Nevadans has passed the Senate. Tipped workers are the backbone of Nevada’s economy, and with prices skyrocketing, working families deserve this break. I hope the House of Representatives passes this bill that permanently ends federal taxes on tips, instead of House Republicans’ unserious version that sunsets no taxes on tips in just four years while gutting health care for the very working families they say they are standing with.”
The other version that Sen. Cortez Masto is referring to exists in the "One, Big Beautiful Bill" — the Republicans' answer to federal budget spending. That bill originated in the House and recently passed out of committee in a rare Sunday night vote.
It also includes a provision on "No Tax on Tips," but has some steeper stipulations, such as barring highly compensated employees and a deduction shelf life between 2025-28.
Secretary-Treasurer Ted Pappageorge of the Culinary Union, the state's largest union representing thousands of tipped workers in Las Vegas, released a statement Tuesday evening on the passing of the No Tax on Tips Act.
Culinary Union applauds Senators Catherine Cortez Masto and Jacky Rosen for taking on the cost of living for working families by working with Republicans to pass No Taxes on Tips legislation in the U.S. Senate.
Culinary Union calls on Congressional representatives in the House to take action and get this done for working families.