Governor Youngkin and VSRC Committed to Passing No Tax on Tips

Richmond, VA – This morning, Governor Glenn Youngkin announced that he has included language in the upcoming state budget to eliminate the state tax on tips, ensuring that Virginia workers can keep their hard-earned money. This follows legislation filed last Friday by Senate Republican Leader Ryan McDougle and Caucus Chair Mark Obenshain to codify the reform and align Virginia’s tax policy with federal guidelines.

“Hard-working Virginians deserve to keep the tips they earn for their service,” said Senator McDougle. “Those tips are directly given to workers by customers for service up and beyond their pay. Governor Youngkin’s inclusion of this policy in the budget is an important step in our support of hard working Virginians and we’re proud to introduced the bill to put it in the Code of Virginia.”

Senator Obenshain added, “Supporting the Governor's 'No Tax on Tips' proposal ought to be a no-brainer for anyone truly interested in helping hardworking Virginians. It’s rare to find an issue where both Kamala Harris and Donald Trump have agreed, but this is the one thing they’ve both supported in principle. If Democrats dig in their heels against this policy, it is a slap in the face to the workers they claim to represent. This initiative is not only a lifeline for service industry employees but also a critical boost for restaurants struggling to attract and retain workers, allowing them to remain competitive in today’s challenging economy.” 

The bill introduced by McDougle and Obenshain would end the state’s practice of taxing gratuities, bringing Virginia in line with federal law and guaranteeing that tips remain untaxed by the state.

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