Last updated on May 27th, 2025 at 10:53 am
The Senate of the United States has raised its rating in the eyes of the people once again as it passed a new piece of legislation, the ‘No Tax on Tips Act,’ on Tuesday.
The new law states that workers who receive tips, such as waiters and hotel staff, are exempt from paying taxes on those tips, provided the tips are paid in cash and reported to their employer for payroll.
The No Tax on Tips Act also offers a tax break of up to $25,000, but this applies only to workers who earn $160,000 or less annually. This amount may increase over time.
The law was proposed by a senator from Texas, Ted Cruz, and received backing from many of his colleagues in the chamber, including two Democrats from Nevada.
One of the supporters of the law is Senator Jacky Rosen, who, in her comments, urged the legislative body to pass it without delay. Since no one objected, it was given the necessary nod in the Senate. She claims that the law will provide support to many staff who work for tips in Nevada.
Some people are pleased with the new law, while others express concerns. They believe it may not be very beneficial or could lead to unfair pay changes. The debate is still ongoing.
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“A big win for service industry workers! Eliminating taxes on tips acknowledges the hard work and dedication of those in lower pay grades. This move could offer much-needed financial relief and set a positive precedent for labor policy reform.”