If President-elect Donald Trump makes good on his campaign promise of no tax on tips, Louisiana lawmakers currently considering sweeping tax reform might have to go back to the drawing board.
Trump introduced the idea in June after speaking to a server in Nevada who told him the government was taking too big of a cut from her tips. . To popularize his promise, he encouraged followers to write on their receipts “Vote for Trump because there’s no tax on tips.”
During an appearance on CNN’s State of the Union, Sunday U.S. House Speaker Mike Johnson said "we're going to try to make that happen in the Congress."
The hospitality sector is the fourth largest employer in the state, and Louisiana Department of Revenue Secretary Richard Nelson said those changes could be complex.
“If the federal government chooses to exempt that, I think normally we’d piggyback what the federal government does and how they treat it, but we’ll have to wait and see. I would tell you that would be a very complicated measure to administer but we’ll have to wait and see what the federal government does,” said Nelson.
Legislators are trying to lower personal income and corporate taxes and offset the loss in revenue by taxing more goods and services, like Netflix and spa services. Nelson says there’s plenty of negotiating going on among both chambers of the legislature.
“There’s a million moving pieces and we just have to work though to process to figure out what’s something we can all agree on. But I do believe at the end of the day we’re going to have significant tax reform that’s going to be a significant benefit to the people of Louisiana,” said Nelson.
But in the meantime, lawmakers continue to debate tax reform measures without taking tips into consideration.
