‘No tax on tips’ bill gains momentum, bipartisan support in NC House
WRAL News- March 11th, 20225
A bill to eliminate taxes on tips, overtime pay and some bonus pay advanced in a state legislative committee Tuesday despite a lack of details on how it might be abused, or how much it could cost the state in lost revenue.
The idea not to tax tips was one of few things Republican Donald Trump and Democrat Kamala Harris agreed on in the 2024 presidential election. And it similarly received bipartisan support Tuesday; the bill has Republican sponsors but the only lawmaker to speak in favor of it during a brief debate was Democratic Rep. Carla Cunningham, D-Mecklenburg.
Cunningham said if the bill becomes law it will be especially helpful to people with intellectual or developmental disabilities.
“They already don’t make as much money as the average wage, so thank you so much,” Cunningham told Rep. Harry Warren, R-Rowan, the bill’s lead sponsor.
Warren’s bill would eliminate all state income taxes on tips and overtime pay. It would also eliminate state income taxes on the first $2,500 of bonuses that workers receive.
The last time the bill came up in committee, fellow lawmakers asked Warren if legislative staff had done an analysis on the potential costs of the bill — or ways that people could use it to try avoiding taxes altogether by reclassifying their salary as tips. Warren said that analysis hadn’t been done.
He no further answers on Tuesday, either, but the House Commerce Committee passed the bill regardless. It now goes to the House Finance Committee, where Warren has said he hopes to be able to give more details on the real-world impact the bill would have.
On Tuesday, Warren said many other states are jumping on the trend and that the federal government might also follow through on Trump’s campaign promise to eliminate taxes on tips and overtime.
“There are at least 20 other states that have bills filed to do exactly the same thing, and there’s a couple bills — one by a Republican, one by a Democrat — in the U.S. Congress,” he said.