‘Life changing:’ Gov. Youngkin proposal would exempt tax on service tips

RICHMOND, Va. (WWBT) - On Monday, Gov. Glenn Youngkin announced a proposal in his budget at McLean’s Restaurant in Richmond.

“No taxes on tips,” he said.

The governor said that would have a big impact on more than 250,000 service workers who work in the food service industry, personal service industry (such as hair stylists), and hospitality industry (such as bellhops).

“No tax on tips will be a foundational piece of our overall budget submission this week,” Youngkin said. “I think this should be bipartisan as we take care of these folks. I look forward to working with members of the General Assembly to make that so. But let’s just recognize, it’s time to reduce tax burdens on hardworking Virginians.”

Virginians like Elaine Cunningham, who’s been a server at the restaurant for over 10 years.

“Tips are a majority of what we make. We don’t see paychecks, we don’t get -- you know our hourly rate, we don’t see that it just goes straight to taxes,” she said.

WATCH YOUNGKIN’S ANNOUNCEMENT:

Cunningham, a mother of four, said all her money goes into her kids. Having that extra cash allows her to provide them with even more.

“That’s really going to make a difference in all of our lives and definitely add a lot to our pocket. Life changing,” she said.

Restaurant owner Dionna Kelleher said a tax exemption on tips helps her with her payroll tax. It not only gives servers some extra money in their wallets, but the small business too.

“When everything else comes down, it helps me as a small business owner in the end. So, I appreciate it and I hope it goes through,” Kelleher said.

The governor even sported an apron and served up coffee and took orders.

If this proposal passes, he said it will return around $70 million to the pockets of service workers each year. It’s money he said the state can afford to give back.

“This is a great way for us to make sure that the tips all of you leave this morning for this hardworking, amazing group of people who make this establishment so special, that they get that money in their pocket and not the government’s, because that money belongs to them,” he said.

Youngkin is set to reveal the rest of his budget Wednesday and said there will be more tax relief included in that proposal.

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