A local representative is trying to eliminate the tax on tips in Wisconsin.
3rd District Representative Ron Tusler, who represents western Manitowoc County in Madison, says Assembly Bill 38 would replicate what President Trump and Congress did in the “One, Big Beautiful Bill,” getting rid of taxes on tips.
During a hearing last week in the Wisconsin Assembly Committee on Ways and Means, Tusler said that no one has ever thought about a tip going toward taxes, but just the person who’s getting it.
The Harrison Republican says tipping is different than income in other ways.
“It is for appreciation,” he stated. “We’re doing that to be helpful, to be considerate toward others. To appreciate the fact that you received good service and these people treated you well. And it’s more like a gift than it is a transactional income, and it should have never been taxed.”
Tusler goes on to say that taxed tips are not the main source of income for the state, since the state only gets about $66 million over two years.
He also notes that taxing tips can be confusing because people will have to report them on their state tax information, but not for federal tax purposes.
“And people are going to screw it up,” he noted. “It’s more difficult than necessary. And really, we generally, as a tax principle, try to align our federal income tax structure like the federal government. So, if the federal government does it, we really should do it. If for no reason other than confusion.”
The 3rd district representative says while he sees this as an easy way to give back to workers, no Democrats have signed on to the bill.
He says he encourages his colleagues across the aisle to sign on, making it more bipartisan.
Meanwhile, Governor Evers tried to put a version of no taxing on tips in the 2025-2027 state budget, but it was removed by Republicans.
