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Subcommittee agrees to carry over bill that would exclude tips from individual income tax
Summary
The subcommittee discussed S.234, a bill to exclude customer tips from state gross income for individual income tax, heard sponsor remarks praising the measure for hospitality workers, raised concerns about potential tax avoidance, and agreed to carry the bill over for amendment work.
The Senate Finance Committee sales and income tax subcommittee discussed S.234, a measure to exclude customer tips from gross income for South Carolina individual income tax purposes.
Grant, the committee staff presenter, told members S.234 would amend the definition of gross income to exclude tips that are reported to an employer on federally required statements. The bill defines tips broadly to include cash tips and tips through electronic payment systems.
Senator Nikki (Lieber in transcript) — identified in committee as the bill sponsor — framed the proposal as broadly popular in hospitality areas, saying, “This bill is simply stolen from Donald Trump's agenda. No tax on tips. It's gonna be wildly popular in my area,” and added his district has a “huge hospitality sector” that supports the change.
Committee members asked how broadly the bill would apply. Grant said the exclusion would apply to “anyone receiving tips.” A senator raised a hypothetical concern that the change could permit shifting taxable income into untaxed tips; the sponsor and others acknowledged that potential edge cases exist and said proposed amendments could be drafted to address them.
After discussion of a possible perfecting amendment, the subcommittee voted to carry S.234 over so members could work on language and bring a perfected amendment at a later subcommittee meeting. The chair announced, “We will carry that bill over and work on an amendment until the next subcommittee meeting.” The carry motion was seconded and adopted by voice vote. No roll‑call tally was recorded in the transcript.
The transcript records interest in working on a perfecting amendment and scheduling the bill for future consideration rather than immediate advancement to the full committee.
