Senator Rosilicie Ochoa Bogh and Senator Shannon Grove said on Apr. 15 that they are continuing their efforts to pass Senate Bill 984, which would allow service industry workers in California to deduct tips from their state income taxes.
The proposed legislation comes as Californians file their taxes, with supporters saying it could help working families keep more of their earnings in a high-cost state. The bill aims to align California’s tax policy with federal law regarding the taxation of tips.
“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 in support of SB 984: “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 Ochoa Bogh’s office, California ranks 48th among all states for tax competitiveness based on a recent State Tax Competitiveness Index.
Senate Minority Leader Brian W. Jones is also a coauthor of SB 984 and voiced his support: “Pro tip for my fellow California lawmakers: People like to keep their hard-earned money,” Jones said. “Families here need relief, and lawmakers should be looking for ways to improve tax relief, not worsen it.” Other Republican coauthors include Senators Marie Alvarado-Gil, Steven Choi, Megan Dahle, Kelly Seyarto, Tony Strickland and Suzette Martinez Valladares.
SB 984 continues an effort started last year but faces challenges ahead before becoming law. The bill is scheduled for a hearing on May 6.
