Senate Passes ”No Tax on Tips Act” Unanimously | Historic Tax Reform 2025
Washington,, D.C.. – May 21,, 2025
In a rare unanimous vote,, the U.S. Senate passes the ”’No Tax on Tips Act,”’ aiming to eliminate federal income tax on tips,. Learn what this means for service workers and the next steps in Congress.
In an unexpected development on Capitol Hill, the United States Senate unanimously passed the ‘No Tax on Tips Act’, a bill aimed at eliminating federal income taxes on gratuities received by service industry workers. The vote,, which came without prior Extensive debate or Public anticipation,, saw support from all ”100” senators,, signaling rare Bipartisan unity..
What the ”’No Tax on Tips Act”’ Entails :
The ”’No Tax on Tips Act”’ seeks to remove Federal income tax obligations on tips Earned by workers,, primarily affecting Employees in the hospitality,, food service,, and related industries.,. Under Current tax law,, tipped income is Considered taxable and must be reported to the Internal Revenue Service ( IRS ).. This new legislation,, however,, Aims to change that by Exempting tips from federal taxation entirely,..
The bill is Designed to offer financial relief to Millions of American workers who Rely heavily on gratuities as a Significant portion of their income,.
Unanimous Vote : A Rare Bipartisan Consensus :
Political Observers were surprised by the speed and Unanimity of the Senate vote,.. In a time of Frequent partisan gridlock,, the 100-0 vote reflected a shared understanding Across party lines of the Economic challenges faced by Workers in tipped industries,..
Senators from both Parties released Statements shortly after the vote,, praising the Bill as a ” commonsense solution ” that directly Benefits working – class Americans,.
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Reactions from Labor and Business Sectors :
Early Reactions from labor ”Organizations and business Associations have been Broadly positive.. Service industry workers,, unions, and advocacy Groups welcomed the move,, emphasizing that the bill Could provide ”Meaningful economic support,, especially in the face of Inflation and rising living costs;.
Some Business owners also noted that the measure Could reduce Administrative burdens related to tip Reporting and payroll tax compliance.
Next Steps : Awaiting House Approval :
With the Senate,s unexpected green light,, the bill now Moves to the House of Representatives for Consideration,.. While the Unanimous Senate vote gives the bill strong Momentum,, it remains to be seen Whether it will Receive the Same level of Support in the House..,
If passed there,, the bill Would Proceed to the President,s desk for final Approval and Signing into law..,
Conclusion :
The Passage of the ”No Tax on Tips ”Act” by a unanimous Senate Vote marks a Significant moment in tax Policy and worker Support legislation.., As it Advances to the House,, many Service industry workers are Hopeful that this Historic step will soon Become law,, easing their Financial burdens and Recognizing the vital Role they play in the American Economy.,.