California bill that would have reduced taxes on tips dies in committee

Yahoo

13-06-2025

(FOX40.COM) — A bill in the California legislature that would have exempted some tipped income from taxes has stalled in committee before ever making it to a floor vote, the bill's author said.
Senator Rosilicie Ochoa Bogh (R-Yucaipa) said Senate Bill 17 was held by the Senate Appropritions Committee.
'I am incredibly disappointed that the committee has failed to recognize the importance of providing tax relief to hardworking service industry employees,' said Senator Ochoa Bogh. 'Tips are not guaranteed income, they fluctuate and are dependent on the generosity of customers. This is not the end of the fight. I will continue advocating for the service industry workers who depend on tips to afford California's high cost of living.'
The Senate Appropriations Committee did not provide a reason for holding the bill, but a spokesperson for Bogh's office noted that the committee's analysis showed the bill would have reduced the state's tax revenue by $180 million in its first full year in effect.
The bill would have exempted up to $20,000 in tips for taxpayers who met three conditions:
Work a job where they regularly receive more $20 per month in tips
Do not currently hold a professional license issued by the Department of Consumer Affairs (with an exception for people licensed by the State Board of Barbering and Cosmetology)
Have an adjusted gross income of less than:
$250,000 if they file taxes as a head of household, a surviving spouse, or jointly with their spouse
Or less than $125,000 as any other type of filer
Bogh's office said the restriction on state-licensed professionals was added after the Senate Revenue and Taxation Committee pointed out that professional service providers such as tax preparers could charge minimally for their services while taking an outsized tip to benefit from the bill.
That committee unanimously passed the bill after it was amended.
On June 6, the California Legislature passed its annual 'House of Origin' deadline, after which, bills that have not been passed out of the chamber they originated in can not move forward.
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