Not one Democrat voted in favor of easing the tax burden on working-class Arizonans this week when they had the chance.
The hands down rejection of the “No Tax On Tips” bill came despite the fact that failed presidential candidate, Vice President Kamala Harris, embraced the no tax on tips concept, first introduced by President Donald Trump during the last election cycle.
All Republicans on the House Committee on Ways and Means voted in favor of the bill, HB2081, which exempts taxation on tipped wages from Arizona’s individual income tax.
All Republicans voted in support of what is described as “a key initiative within the 2025 House Majority Plan to reduce costs and unleash economic prosperity.”
73 percent of Arizonans say taxes in the state are too high, and 94 percent say they are concerned about inflation, so the bill was considered a “no-brainer” for passage by politicos.
As amended in the hearing, the bill exempts all tips from state personal income tax.
Supporters of the legislation include the Republican Liberty Caucus and the Arizona Licensed Beverage Association.
A representative from Our Voice Our Vote Arizona, a member-led civic engagement organization, also voiced support during testimony.
“A key feature of a good taxation system is voluntary compliance and simplicity of administration,” said Committee member Representative Neal Carter. “Tips are often paid in real time and in strange amounts. Taxing tips simply punishes the honest because strict compliance is difficult to achieve.”
The bill now moves to the Rules Committee for further review before heading to the full House for consideration.