Senator Rosilicie Ochoa Bogh (R-Yucaipa) has announced that despite strong support from service industry workers and business groups, Senate Bill 17, has been held in Senate Appropriations Committee. The bill, which sought to provide a California state income tax deduction for tips, was halted, leaving service workers without much-needed financial relief.
“I am incredibly disappointed that the committee has failed to recognize the importance of providing tax relief to hardworking service industry employees,” said Senator Ochoa Bogh. “Tips are not guaranteed income, they fluctuate and are dependent on the generosity of customers. This is not the end of the fight. I will continue advocating for the service industry workers who depend on tips to afford California’s high cost of living.”
SB 17 aimed to bring much-needed relief to California’s restaurant, hospitality, and service workers, many of whom rely on tips to make ends meet. This effort followed previous attempts to push similar legislation, underscoring the ongoing need to support working-class Californians. The bill reflected a growing bipartisan recognition that tips serve as a reward for exceptional service rather than a predictable income source.
“California’s failed policies have resulted in a self-inflicted affordability crisis that is putting a strain on millions of hard working Californians. Exempting tips from state tax would have provided some immediate relief for service sector workers who rely on their tips to make ends meet. This is a failure by the majority party and a missed opportunity to provide needed relief for Californians who need it most,” said Senator Suzette Martinez Valladares (R-Santa Clarita), joint author of SB 17.
Industry advocates have long argued that protecting tips from taxation would allow service workers to keep more of their hard-earned money, stimulating local economies and helping businesses retain employees in a competitive labor market. However, the committee’s inaction leaves these workers in the same financial predicament.