SB 17, the No Tax Relief for California’s Tipped Service Workers has been held in committee.
Senator Rosilicie Ochoa Bogh (R-Yucaipa) has announced that despite strong support from service industry workers and business groups, Senate Bill 17, has been held in Senate Appropriations Committee. The bill, which sought to provide a California state income tax deduction for tips, was halted, leaving service workers without much-needed financial relief.
“I am incredibly disappointed that the committee has failed to recognize the importance of providing tax relief to hardworking service industry employees,” said Senator Ochoa Bogh. “Tips are not guaranteed income, they fluctuate and are dependent on the generosity of customers. This is not the end of the fight. I will continue advocating for the service industry workers who depend on tips to afford California’s high cost of living.”
SB 17 aimed to bring much-needed relief to California’s restaurant, hospitality, and service workers, many of whom rely on tips to make ends meet. This effort followed previous attempts to push similar legislation, underscoring the ongoing need to support working-class Californians. The bill reflected a growing bipartisan recognition that tips serve as a reward for exceptional service rather than a predictable income source.
“California’s failed policies have resulted in a self-inflicted affordability crisis that is putting a strain on millions of hard working Californians. Exempting tips from state tax would have provided some immediate relief for service sector workers who rely on their tips to make ends meet. This is a failure by the majority party and a missed opportunity to provide needed relief for Californians who need it most,” said Senator Suzette Martinez Valladares (R-Santa Clarita), joint author of SB 17.
Industry advocates have long argued that protecting tips from taxation would allow service workers to keep more of their hard-earned money, stimulating local economies and helping businesses retain employees in a competitive labor market. However, the committee’s inaction leaves these workers in the same financial predicament.
LEGISLATIVE COUNSEL’S DIGEST
Statement on unanimous passage of the federal “No Tax on Tips Act”
May 22 – Senator Rosilicie Ochoa Bogh (R-Yucaipa) has released the following statement in response to the U.S. Senate’s unanimous passage of the federal “No Tax on Tips Act” championed by President Donald Trump. The “No Tax on Tips Act” would establish a new tax deduction of up to $25,000 for tips. The measure now moves to the U.S House of Representatives.
“I applaud the U.S. Senate for putting service workers first and providing much needed tax relief,” said Senator Ochoa Bogh. “Now it’s California’s turn. Tipped workers are taxed on inconsistent and unpredictable income causing instability for families already struggling to make ends meet. That is why I’m working diligently to get SB 17 to the finish line.”
On the first day of the new legislative session, Senator Rosilicie Ochoa Bogh (R-Yucaipa), joined by Senators Shannon Grove (R-Bakersfield) and Suzette Martinez Valladares (R-Santa Clarita) as joint authors, introduced Senate Bill 17, which will provide a California state income tax deduction for tips.
Under SB 17, workers earning tips would be eligible for a tax deduction of up to $20,000 for tips 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 would bring much-needed relief to Californians who rely on tips to survive. This measure reflects a growing bipartisan recognition that tips serve as a reward for exceptional service rather than a predictable income source.
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