As Californians and Americans alike file their taxes, Senator Rosilicie Ochoa Bogh (R-Yucaipa) and Senator Shannon Grove (R-Bakersfield) are doubling down on their legislation to allow service industry workers to keep more of their hard-earned money. Their Senate Bill 984 would conform state tax law with federal law to allow workers who receive tips to deduct those tips from their state income taxes.
“On Tax Day, Californians are reminded just how much of their hard-earned money goes to taxes,” said Senator Ochoa Bogh. “California is already one of the most expensive places in the country to live, so for many working families, tips help keep food on the table and the lights on. This bill helps tipped workers keep more of what they earn.”
California ranks 48th among the 50 states for tax competitiveness in the Tax Foundation 2026 State Tax Competitiveness Index.
“Hardworking Californians should be allowed to keep more of the tips they earn,” said Senator Grove. “A state tax break on tips means service workers can actually take home the extra money customers give them for the great service they provide. When we make these jobs more rewarding, it helps local businesses and neighborhoods thrive while making these important professions even more appealing.”'
SB 984 is a continued effort from last year and faces an uphill battle, despite the direct-to-worker support it would provide.
“Pro tip for my fellow California lawmakers: People like to keep their hard-earned money,” said Senate Minority Leader Brian W. Jones (R-San Diego), also a coauthor of the measure. “Families here need relief, and lawmakers should be looking for ways to improve tax relief, not worsen it.”
Other Senate Republican coauthors include Senators Marie Alvarado-Gil, Steven Choi, Megan Dahle, Kelly Seyarto, Tony Strickland and Suzette Martinez Valladares.
The bill is set for a hearing on May 6, 2026.