Today Senator Suzette Valladares (R-Santa Clarita) announced that her bill to exempt tips from taxes, (SB 17) has passed unanimously out of the Senate Revenue and Taxation Committee with a 5-0 vote. The bill, introduced on her first day of session, would provide immediate relief for California’s service and hospitality workers.
“I’m grateful to the committee chair, Senator McNerney, and the other members for their support of this important tax relief measure for California’s service workers,” said Senator Valladares. “During my twenties, I was a struggling student working as a waiter to make ends meet. I know firsthand how hard it is to earn a living in the service industry. These hardworking Californians should be able to keep more of what they earn – it’s time to ease their tax burden and help them get ahead.”
Californians are experiencing an affordability crisis that is driving up prices of everyday essentials like groceries and utilities. With millions working jobs that receive tips, this bill, SB 17, would offer back some affordability to our dedicated service and hospitality workers.
Under SB 17, workers earning tips would be eligible for the deduction if their adjusted gross income is under $125,000 for individuals or $250,000 for joint filers. The bill also updates the state’s tax code to align the definition of tips with federal standards while excluding licensed professionals—except barbers and cosmetologists—from claiming the deduction.
This bill, which is joint authored along with Senator Rosilicie Ochoa Bogh (R–Yucaipa) and Senator Shannon Grove (R-Bakersfield), aims to bring much-needed relief to Californians who rely on tips to survive.
The new policy would ensure every dollar left as a tip directly goes into the pockets of those who earned it. More money in the hands of everyday consumers will have a positive effect on their communities, helping small businesses.
SB 17 will now be moved to its next committee.