COLUMBUS, Ohio — Both major presidential candidates have now endorsed eliminating taxes on tips for hospitality and service workers.
Former President Donald Trump first proposed the idea at a campaign rally in Las Vegas in June. This this past weekend Vice President Kamala Harris made the same promise, also at a Las Vegas rally. There is also now a proposal to exempt tips from income taxes on the state level.
Rose Erikson has been a barista at Stauf's in Grandview since October. The college graduate is considering going to grad school and says not having to pay federal or state taxes on tips would really help her finally be able to tuck a little money away.
"It would mean savings," Erikson said. "Honestly, like right now I feel like I can't put anything in savings because I'm paying rent and groceries."
Republican State Representative Jay Edwards introduced a bill to exempt tips and gratuities from state income tax on July 29 after hearing former President Trump promote the idea at one of his rallies. He says it would be a small way to help tipped workers.
"When you're dealing with service workers in this state, people that are waiting on you at a restaurant, a lot of times those younger men and women, or older men and women are working two or three jobs trying to make ends meet," Edwards said. "They're trying to pay the rent."
In Ohio, workers making up to $26,050 already pay no state income tax. So, this exemption would kick in only on tip income for those making above that. Edwards says the state Legislative Service Commission will figure out how much the measure would cost the state in lost income tax revenue.
"I don't think it will be a lot of money we're talking about," Edwards said. "But it's a lot of money, even if it's a couple hundred dollars a year, that's a lot of money to these people that are, again, most of which living paycheck to paycheck."
"Tipped employees are a critical part of Ohio's vibrant restaurant industry and ending tax on tips would help to further strengthen their economic condition."
Ohio Restaurant and Hospital Alliance President and CEO John Barker said about Trump's and Harris' campaign promises and Edwards' bill.
"The ORHA supports policy that stimulates growth in restaurants of all sizes, helps operators to make greater investments in their workforce and communities and supports the amazing people who work in Ohio restaurants and hospitality businesses," Barker added.
Rose Erikson is one of those people who would appreciate the extra support.
"It would be helping people at the ground level who are struggling to pay for things like student loans and rent," Erikson said.
Congress and the Ohio Legislature would have to approve the respective tax cuts.
Rep. Edwards' bill is currently a one-sentence placeholder bill expressing the General Assembly's intent to exempt tips and gratuities from income tax. He expects the full language of his bill to be introduced when the legislature reconvenes in the fall.
Full statement from John Barker, President and CEO, Ohio Restaurant and Hospitality Alliance:
"The Ohio Restaurant & Hospitality Alliance (ORHA) is aware of Vice President Harris and Former President Trump's campaign promises to exempt tips from federal income tax. Tipped employees are a critical part of Ohio's vibrant restaurant industry and ending tax on tips would help to further strengthen their economic condition. We are always open to ideas that support Ohio's restaurant and hospitality community and look forward to our continued work with the National Restaurant Association regarding the No Tax on Tips Act that's been introduced in both houses on Congress.
We also continue to closely monitor Ohio HB 643, introduced by Rep. Jay Edwards, which expresses intent to exempt tips and gratuities from state income tax. Tax policy plays a major role in the vitality of the restaurant and hospitality industry in Ohio and across the country. The ORHA supports policy that stimulates growth in restaurants of all sizes, helps operators to make greater investments in their workforce and communities and supports the amazing people who work in Ohio restaurants and hospitality businesses."