How a no taxes on tips policy could affect Texas

TYLER ( KETK ) – Removing tax on tips is something both presidential candidates, Kamala Harris and Donald Trump, say they are fighting for during this election season, the proposed policy could potentially help millions of Texas workers.

In Texas there is over 1.3 million restaurant employees, according to the Texas Restaurant Association (TRA). A policy taking away that tax could potentially have a huge impact.

The TRA chief public affairs officer Kelsey Erickson Streufert said that currently, tips are taxed like any other income.

A policy change could mean restaurant employees like servers, waiters and runners would no longer be taxed on that portion of their income.

“Tip laws stay the same, servers are still required to report their tips, really the only thing at changes is the tax rate would be zeroed out,” Streufert said. “We believe no taxes on tips would help over 2.2 [million] restaurant employees.”

Industry experts are hoping that a policy like this would support current employees and bring future employees to the service industry.

“To make these jobs more attractive and make these people more successful,” Streufert said.

Several tax provisions are set to expire next year, so the TRA is hoping to be a part of these conversations moving forward.

“The devils in the details, so we look forward to working with whoever’s in the White House and congress to make sure that those details not only work for our really hard-working tip earners but the industry as a whole,” Streufert said.

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