Democrat lawmakers may tax the “no tax on tips”

By Taxpayers Association of Oregon
OregonWatchdog.com

Congress passed and President Trump signed the 14 tax cuts in the Big Beautiful Bill this summer.  It included a big tax relief portion by reducing taxes on tips.  Up to $25,000 of their tips will be tax free.   Because this savings is so big, it will expire in 2028.  Because Oregon income tax rules are tied to the Federal Government rules, this savings will apply to our Oregon income taxes.   This means liberal lawmakers are upset at passing on tens of millions of tax relief to our hard-working restaurant employees.   These lawmakers do not want to give up any state budget funds.

This is why they are actively considering making a state law change that will disconnect the Oregon tax law from Federal law on the portion of taxing on tips.   It sounds innocuous.  Yet, it will, in effect, be increasing the tax on people’s tips.

To make this disconnect happen, lawmakers need to act before December 31st.  With the special session being extended by another two weeks, it may leave the door open for further discussion or hearings on this issue.  If lawmakers were to do a disconnect for the tax/tips and the overtime tax relief and the business deductions in the Big Beautiful Bill, lawmakers would be able to claw back $800 million back from lost tax revenue.   Their eyes are on this possibility.

—  Help us spread the word. Contribute online at OregonWatchdog.com  (learn about a Charitable Tax Deduction or Political Tax Credit options to promote liberty).