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Under proposal, Wisconsin service workers to skip paying taxes on cash tipsSubmitted: 05/23/2019
Story By Ben Meyer

Under proposal, Wisconsin service workers to skip paying taxes on cash tips
ELCHO - Wisconsin counts "tipped" employees as some of its lowest-income workers.

Bartenders, waiters, and valets are rarely among the wealthy, but those workers could be getting a new tax break soon.

Right now, workers are supposed to pay taxes on the cash tips they get from customers.

A bill in the state legislature would make Wisconsin the first state to stop taxing them on that income.

At Koni K's restaurant in Elcho, servers make three dollars an hour. They need tips to survive.


"That's all of our income, basically. After taxes, we don't really have a check," said waitress Angie Hennen.

Owner Connie Kaplenski is actually paying her servers more than minimum wage. That rate is just $2.33 an hour for tipped employees in Wisconsin.

"I've got to be able to pay all of the other bills. Sometimes it gets a little tough. I'd love to pay them a lot more than what I do," Kaplenski said.

Sen. Andre Jacque (R-De Pere) and Rep. Cody Horlacher (R-Mukwonago) proposed the bill to make cash tips non-taxable.

"It is going to provide one less fiscal constraint for low-income workers," Jacque said.

Under Jacque and Horlacher's bill, cash tips wouldn't be subject to state income taxes, only federal taxes. Tips left with a credit or debit card would be taxed like normal.

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