Macomb Today

State Rep. Joe Aragona on Wednesday officially introduced legislation to eliminate taxes on tips.

“This is Trump’s idea that Vice President Harris stole, so now I’m stealing it for Michigan,” said Aragona, R-Clinton Township (Macomb County). “If the Democrats were smart, they’d pass it to show that this isn’t just a campaign gimmick by Harris, but I’m betting they won’t do that because they know that if the vice president really wanted to get rid of taxes on tips, she could go to Congress and make it happen right now instead of just making promises. She is the sitting vice president, after all.”

Aragona’s ‘no taxes on tips’ bill is straightforward: if approved by the Legislature and signed into law, starting with the 2025 tax year, tips would not be considered taxable income in Michigan. That means tipped employees would be able to deduct proven tips (as indicated on the employee’s declaration for federal insurance contributions) from their adjusted gross income on their state income taxes.

The bill also defines the term gratuities and sets the definition of a tipped employee as an employee working in an occupation in which the employee regularly receives more than $30 a month in gratuities.

“Quality waitstaff hustle for their money. Getting rid of taxes on tips will give them an incentive to work more and provide better customer service. It will help with staffing issues because more people will want to work in restaurants, and customers will get better service,” Aragona said.

House Bill 5941 was referred to the tax policy committee.