Gov. Tony Evers vetoes ‘no tax on tips’ and overtime bills

MADISON – Gov. Tony Evers on Friday vetoed a bill that would have exempted Wisconsinites from paying state income tax on tips and some overtime pay, arguing that the measures did not provide a comprehensive, permanent solution.

In his veto message, Evers wrote: “Meaningful tax cuts for workers are a serious initiative, and I have made clear from the beginning that my expectation has been that when we provide tax relief, it should be real, responsible, and aimed at the middle class.” “We must also keep it within our means to ensure that our tax policy changes are sustainable and do not force us to cut services or raise taxes in the future.”

Both Republican bills passed by the parliament With some Democratic support.

under one, cash and paid tips It will be exempt from state income tax. This provision will cover the period from the 2025 tax year to the 2028 tax year.

Under the latter, workers would be able to deduct up to $12,500 from overtime pay for single filers and up to $25,000 for joint filers. Although the federal version of the overtime provision would be repealed after the 2028 tax year, that bill had no expiration date.

Evers included a measure in his 2025-27 state budget proposal that would eliminate the state income tax on cash tips. Like many of the governor’s initial proposals, Republicans on the Legislature’s Joint Finance Committee I picked it up it was early in the process and I didn’t revisit it at that time.

The governor also said he vetoed the GOP tipping bill because it was bound by federal law. He said he opposed “effectively ceding control over the direction of state policy to Congress.”

Evers, who vetoed the overtime exemption, said he opposed “changing the tax code to treat Wisconsin workers who earn similar wages differently simply because they are classified as salaried or hourly workers.”

He argued that a salaried worker earning $35,000 a year should not pay a different amount of taxes than an employee earning the same wage working hourly.

Evers also wrote that “while Wisconsinites across our state are working hard but unable to afford rising costs, the state should not suffer such a large financial impact for the small portion of workers receiving overtime pay.”

Earlier this week, U.S. Rep. Tom Tiffany, a Republican gubernatorial frontrunner, said he would sign these bills into law if elected. Evers is not seeking re-election to a third term.

“Madison has taken too much away from people who have been working for too long,” Tiffany said in a statement. “Whether you’re a food server, a bartender, a nurse, a firefighter, a machine operator or a construction worker, you should keep more of your paycheck, and as governor, I’ll make sure of that.”

Evers’ veto message referenced a recently released Wisconsin Policy Forum report. state tax burden has reached record lows in recent years and finished in the last 16 nationally.

Jessie Opoien can be reached at jessie.opoien@jrn.com.

This article first appeared in the Milwaukee Journal Sentinel: Governor Tony Evers vetoes ‘no tax on tips’ and overtime bills