LANSING, Mich. — Sen. John Damoose on Wednesday introduced legislation to exempt tips earned by the state’s hospitality workers from income taxes in the state of Michigan.
“Tourism and hospitality are both incredibly important to the Northern Michigan and Upper Peninsula economies,” said Damoose, R-Harbor Springs. “A lot of people are concerned with rising costs and how they are going to make ends meet. My goal in introducing this legislation is to provide some level of alleviation of these everyday concerns for these workers.”
Damoose’s legislation largely mirrors federal proposals and would provide a 100% exemption for income earned as a tip.
“A tip is earned by an employee going above and beyond and can fluctuate greatly based on an immeasurable number of factors,” Damoose said. “The government already gets their hands on enough of people’s money, and this is just one of many ways we can provide some financial relief. I hope this legislation opens the door for other forms of tax relief for Michigan workers as well.”
The senator also said he hopes this legislation could serve as a protective layer should a deal to save Michigan’s tipped wage provisions fails to come to fruition before Feb. 21.
“As we work through the issue, continue hearings and work to get tip credit legislation to the governor’s desk, I wanted to introduce this measure as a way to safeguard hospitality workers’ tipped earnings, which are expected to drop should the new law take effect without a deal,” Damoose said. “The reality is that many tipped workers will face a significant pay cut under the new law. Eliminating the tax burden on tipped earnings will raise wages for hospitality workers without burdening or driving up costs for businesses.”
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