Committee advances bill to conform California law to new federal treatment of tipped income

Senator Ochoa Bote presented SB 984, a measure to conform California tax law to a new federal deduction for tipped income enacted at the federal level. The author framed the bill as a bipartisan measure to provide tax relief to tipped workers in restaurants, hospitality and other tipped professions.

Witnesses including Matt Sutton of the California Restaurant Association and Scott Coffin of the Howard Jarvis Taxpayers Association testified in strong support. Sutton said the change would align state policy with federal law and provide relief to regularly tipped employees and other professions that receive tips. Coffin highlighted that 36 states automatically conform to federal changes and argued conformity reduces taxpayer confusion and compliance issues.

Committee members had no major opposition to the bill in the hearing record. The subcommittee moved SB 984 to the Committee on Appropriations and the motion carried in subcommittee procedure.