Virginia Gov. Glenn Youngkin (R) has announced a proposal to do away with taxes on tips in the service industry, saying it will return an estimated $70 million annually “to the pockets of hardworking Virginians.”
Youngkin made the announcement during a Monday visit to McLean’s Restaurant in Richmond:
“No taxes on tips,” he said in front of the press, receiving applause from restaurant staff and patrons.
If the budget proposal, which the governor is set to present in full on Wednesday, is successful, Virginia would become the first state in the nation to eliminate state income taxes on tips.
“No tax on tips will be a foundational piece of our overall budget submission this week,” Youngkin said. “I think this should be bipartisan as we take care of these folks. I look forward to working with members of the General Assembly to make that so. But let’s just recognize, it’s time to reduce tax burdens on hardworking Virginians.”
The proposal would cover not just restaurant servers, but people with other service jobs that largely rely on tips such as hair stylists and hospitality workers.
Elaine Cunningham, who has served at McLean’s Restaurant for more than a decade, said Youngkin’s proposal would help her and her four children.
“Tips are a majority of what we make. We don’t see paychecks, we don’t get — you know our hourly rate, we don’t see that it just goes straight to taxes,” she said told WWBT.
“That’s really going to make a difference in all of our lives and definitely add a lot to our pocket. Life changing,” she added.
Dionna Kelleher, the restaurant’s owner, said the move would help out her small business as well since her payroll tax will go down.
“When everything else comes down, it helps me as a small business owner in the end. So, I appreciate it and I hope it goes through,” Kelleher said.
“This is a great way for us to make sure that the tips all of you leave this morning for this hardworking, amazing group of people who make this establishment so special, that they get that money in their pocket and not the government’s, because that money belongs to them,” Youngkin added during his appearance at the establishment.
A statement from his office said the proposal “will return an estimated $70 million annually to the pockets of hardworking Virginians to further deliver on Governor Youngkin’s commitment to lower the cost of living for working families across the Commonwealth. This builds on the more than $5 billion in tax relief already delivered for Virginians under his administration.”