Some state lawmakers are trying to make cash tips tax free.
A bill was recently drafted that would make cash tips received while working exempt from state income tax, though they’d still need to be reported for federal tax returns. If the bill passes Wisconsin would become the first state with a state tax exemption for cash tips.
So where do they plan on making up that money? For a state that claims there isn’t enough tax dollars coming in that they have to up existing taxes can’t afford to cut income taxes for some of the people and expect the rest to cover it.