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Youngkin’s budget plan, announced Tuesday, Dec. 17, could mean an extra $70 million annually for service industry workers across the Commonwealth, including food servers, hair stylists, and hotel staff, he said.
“We have delivered over $5 billion in tax relief to date, and we remain committed to lowering the cost of living for hardworking Virginians. It’s their money, not the government’s,” Youngkin said.
The tax break would apply to more than 250,000 Virginians within the food service industry, personal service industry (such as hair stylists), and hospitality industry (such as bellhops and concierges) could benefit from the proposed tax relief. according to the state’s Department of Taxation and Employment Commission.
If passed, Virginia residents earning tips could deduct them on their state tax return, as long as the income is reported on federal taxes.
Youngkin’s administration cited Virginia’s strong financial footing—marked by "record employment, rising revenues, and a AAA bond rating—as the reason for proposing the tax cut while maintaining fiscal responsibility," officials said.
“By removing tips from taxable income ..." Youngkin added.
"It will directly increase the take-home pay of hundreds of thousands of Virginians and give them more buying power, which in turn will improve financial stability, stimulate local economies, and honor the value of their hard work."
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