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Sen. Cruz Introduces Bipartisan, Bicameral No Tax on Tips Act

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas), joined by Sens. Rick Scott (R-Fla.), Jacky Rosen (D-Nev.), Catherine Cortez Masto (D-Nev.), Steve Daines (R-Mont.), Pete Ricketts (R-Neb.), and Kevin Cramer (R-N.D), introduced the No Tax on Tips Act to exempt tips from being subject to taxation under the federal income tax. Rep. Vern Buchanan (R-Fla.-16) was joined by Rep. Byron Donalds (R-Fla.-19) in introducing the companion legislation in the U.S. House of Representatives.

Upon introduction, Sen. Cruz said, “American workers in many industries rely on tipped wages to make ends meet. Today, I’m introducing my bipartisan No Tax on Tips Act—legislation I authored to fulfill President Trump’s promise to end the wrongful practice of taxing voluntary tips. I’ve long believed the GOP should be the party of bartenders, of waiters and waitresses, and this bill is an important step to ensure we are addressing the economic needs of working Americans. This pro-worker bill will deliver relief to families facing rising costs caused by the Biden administration’s inflationary policies.”

Sen. Rosen said, “Nevada’s service and hospitality workers are the backbone of our economy, and they deserve financial relief at a time when they are getting squeezed by rising costs. This bipartisan bill will ensure tipped workers in Nevada can keep more of their hard-earned money. I’ll also keep fighting to raise the minimum wage and eliminate the subminimum wage for service employees, lower costs, and cut taxes for all hardworking Nevadans.”

Sen. Cortez Masto said, “Working families in Nevada deserve a break, and this bipartisan bill will put more money in their pockets. This is one part of my comprehensive work to lower costs for working families and deliver for Nevadans across the state.”

Sen. Daines said, “Hard-working Montanans have been hit hard with Biden’s inflation, and by making tips tax-free we’re delivering on President Trump’s promise to lower taxes and bring back American prosperity. ‘No Tax on Tips’ will bolster the workforce and I’m looking forward to working with President Trump on more ways to unleash our economy.”

Sen. Rick Scott said, “During my time as Governor of Florida, I worked to cut taxes over 100 times to help businesses thrive, families keep more of their hard-earned dollars and turn our entire economy around. After four years of President Biden’s skyrocketing inflation making life harder for families, it’s about time we follow Florida’s turnaround playbook and take significant action to cut taxes with the No Tax on Tips Act. President Trump is laser-focused on getting our economy back on track, and passing this bill ASAP will be a great start.”

Rep. Buchanan said, “Florida’s tourism-driven economy thrives because of the hardworking men and women in our restaurant and hospitality industries, many of whom rely on tipped wages to support their families. I’m introducing the No Tax on Tips Act with Congressman Donalds to ensure that these essential workers are able to keep more of the money they’ve earned, without interference from Washington. As Vice Chairman of the House Ways and Means Committee, and a former chairman of the Tax Subcommittee, cutting taxes for working Americans is my top priority.”

Rep. Donalds said, “For far-too-long, Washington’s focus has been on how much of your paycheck politicians and unelected bureaucrats will take to fund their destructive agendas. Americans deserve to take home more of what they have earned, especially given the self-inflicted economic hardships created by the Biden administration. I am proud to have introduced the ‘No Tax on Tips Act’ last Congress alongside Senator Cruz (R-TX) and look forward to its swift passage in the 119th Congress. Hardworking Americans across our Southwest Florida community, the Sunshine State, and the nation deserve a government that will put them first.”

National Restaurant Association, Executive Vice President for Public Affairs, Sean Kennedy said, “Eliminating taxes on tips would put cash back in the pocket of a significant number of workers in the restaurant and foodservice industry and could help restaurant operators recruit industry workforce. The No Tax on Tips Act of 2025is sensible legislation that includes refinements and protections to make it fiscally responsible while still benefiting our employees. We appreciate Sen. Cruz’s efforts to refine his legislation, and look forward to working with him on this and other legislation to support restaurant vitality in Texas and across the country.”

Professional Beauty Association, Executive Director, Nina Daily said, “We thank Senator Ted Cruz and his team for acknowledging the contributions of beauty and barber professionals, as well as small business owners in our industry. As the second most-tipped sector after restaurants, we deeply value the Senator’s efforts to support the 1.3 million licensed beauty professionals and the employers who sustain this vital industry across the United States. Ensuring tax fairness across sectors and advocating for the working class are fundamental to our nation’s tax principles. We look forward to working together to turn this legislation into a meaningful reality for the hardworking individuals and businesses that make up our Main Street economy.”

International Franchise Association, Chief Advocacy Officer, Michael Layman said, “We commend Senator Cruz for re-introducing this balanced ‘No Tax On Tips’ proposal that helps workers and small business owners alike. Many of the 830,000 franchises and nine million workers we represent will benefit from this federal payroll tax credit. We appreciate this effort to bring parity across industries with tipped employees and level the playing field for small businesses on Main Street nationwide.”

BACKGROUND:

The bill exempts “cash tips”—cash, credit and debit card charges, and checks—from federal income tax by allowing taxpayers to claim a 100% deduction at filing for tipped wages. The updated text includes guardrails to ensure only traditionally tipped employees will benefit from No Tax on Tips.

Read the bill text here.

Sen. Cruz has consistently prioritized making sure American taxpayers keep their hard-earned income and Texans have access to jobs:

  • Sen. Cruz helped enact historic tax reform in 2017, which gave a tax cut to virtually every taxpayer in America. It reduced taxes on small businesses, farmers, ranchers, and job producers, which has helped bring jobs to Texas.
  • He has fought to make permanent the 2017 historic tax cuts for individuals.

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