Panel hears competing views on income-tax subtraction for tipped workers; bill carried over
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Summary
SB 694 would allow a subtraction of tipped income—25% in 2026 rising to 50% in 2027—intended to leave more money with servers and service workers. Business advocates supported it; education and policy groups opposed it as an unequal carve‑out; the committee carried the measure for further review.
Sen. Jordan told the committee SB 694 would reflect the reality that tips are a core part of income for servers, bartenders and hospitality workers. The bill phases in an income‑tax subtraction for tipped income: 25% in 2026 and 50% in 2027, the sponsor said, and it would not change reporting or wage laws.
Public commenters split. Laura Smith of Americans for Prosperity said the group supported the measure as part of lowering income tax overall. The Commonwealth Institute and the Virginia Education Association opposed it, calling it an unequal carve‑out that would not assist other low‑paid workers such as school support staff. Committee members raised concerns about budget impact and equity and voted to carry the bill over for further study.
What happened: The bill was carried over so members can review fiscal impacts and equity implications.
Provenance: Sponsor presentation begins at SEG 603; public comment and committee action continue through SEG 709.
