Assembly Bill 38 proposes an income tax exemption for cash tips received by employees from customers of their employers. The bill introduces new legal language by creating a specific statute, 71.05 (1) (j), which defines cash tips as amounts received by employees. Additionally, the bill amends several existing statutes to remove references to tips in the context of calculating taxable income for nonresidents and part-year residents, thereby excluding cash tips from the income that is subject to state taxation.

Furthermore, the bill repeals two existing provisions under 71.63 (6) (n) that previously outlined conditions related to tips paid to employees. The renumbering and amendment of the remaining provision under 71.63 (6) (n) reflects this change. The bill is set to take effect for taxable years beginning after December 31, 2024, and may be reviewed by the Joint Survey Committee on Tax Exemptions due to its implications on state tax policy.

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