Assembly Bill 38 proposes the creation of an income tax exemption for cash tips received by employees from customers of their employers. This new provision is introduced as section 71.05 (1) (j) of the statutes. The bill also includes amendments to various existing statutes, specifically modifying sections related to the calculation of taxable income for nonresidents and part-year residents, where references to "tips" are deleted from several subsections. Additionally, the bill repeals two existing provisions under section 71.63 (6) (n) that pertain to tips paid to employees.

The bill aims to simplify the tax treatment of cash tips, ensuring that they are not included in the taxable income calculations for employees. The changes are intended to take effect for taxable years beginning after December 31, 2024. By removing the previous stipulations regarding tips and establishing a clear exemption, the bill seeks to provide financial relief to employees who rely on tips as a significant part of their income.

Statutes affected:
Bill Text: 71.05(6)(b)19.cm, 71.05, 71.05(6)(b)19.dm, 71.05(6)(b)28.e, 71.05(6)(b)28.f, 71.05(6)(b)32.b, 71.05(6)(b)32.c, 71.05(6)(b)33.b, 71.05(6)(b)33.c, 71.05(6)(b)35.c, 71.05(6)(b)35.d, 71.05(6)(b)38.c, 71.05(6)(b)38.d, 71.05(6)(b)42.c, 71.05(6)(b)42.d, 71.05(6)(b)43.f, 71.63(6)(n)1, 71.63, 71.63(6)(n)2