Senator Rosilicie Ochoa Bogh and Senator Shannon Grove said on Apr. 15 that they are advocating for Senate Bill 984, which would allow service industry workers in California to deduct tips from their state income taxes. The announcement comes as Californians file their taxes and consider the financial impact of current tax laws.
The proposed legislation is intended to help working families keep more of their earnings, especially in a state known for its high cost of living. Supporters say that exempting tips from state income tax would provide much-needed relief for those who rely on gratuities as part of their income.
“On Tax Day, Californians are reminded just how much of their hard-earned money goes to taxes,” said Senator Ochoa Bogh. “California is already one of the most expensive places in the country to live, so for many working families, tips help keep food on the table and the lights on. This bill helps tipped workers keep more of what they earn.”
Senator Grove also spoke about the benefits: “Hardworking Californians should be allowed to keep more of the tips they earn. A state tax break on tips means service workers can actually take home the extra money customers give them for the great service they provide. When we make these jobs more rewarding, it helps local businesses and neighborhoods thrive while making these important professions even more appealing.”
According to supporters, California ranks near the bottom nationally in terms of tax competitiveness based on recent indexes. Senate Minority Leader Brian W. Jones, a coauthor of SB 984, said: “Pro tip for my fellow California lawmakers: People like to keep their hard-earned money. Families here need relief, and lawmakers should be looking for ways to improve tax relief, not worsen it.”
Other Republican senators supporting SB 984 include Marie Alvarado-Gil, Steven Choi, Megan Dahle, Kelly Seyarto, Tony Strickland and Suzette Martinez Valladares. The bill is scheduled for a hearing on May 6.
