
The House Committee on Ways and Means has recently voted to advance HB2081, a measure specifically designed to remove taxation on tipped wages within the state of Arizona. According to a press release, the bill was sponsored by State Representative Gail Griffin and passed largely along party lines—garnering support from Republicans while facing opposition from Democrats. The legislation forms a part of the 2025 House Majority Plan, which advocates for economic prosperity through reduced costs.
As the text stands, HB2081 aims to wholly exempt tips from state personal income tax, framing the proposal as a relief for those who depend on gratuities to support themselves and their families. State Representative Gail Griffin, who herself has a background in the service industry, expressed her support, stating, "Tips are an expression of appreciation from customers for services provided. Tips are gifts and, in my opinion, should not be taxed," as per the Arizona House of Representatives. Griffin further noted that the proposal will allow Arizonans to retain more of their "hard-earned money." It's clear that for many supporters, the notion of completely exempt tips from taxation represents a tangible response to the calls for tax relief from a significant portion of Arizona's populace.
Several groups have voiced their approval for the initiative, including the Republican Liberty Caucus and the Arizona Licensed Beverage Association. Echoing this support, Our Voice Our Vote Arizona, a civic engagement organization, also backed the bill during the committee hearing. These endorsements suggest a shared belief among some quarters that the current tax system needs revising to better serve the needs of tipped employees.
Supporters of the bill argue that its implementation would simplify the burdens of tax compliance for workers in the service industry. "A key feature of a good taxation system is voluntary compliance and simplicity of administration," said Republican State Representative Neal Carter during the committee hearing. He added that tax tips are to "punishes the honest because strict compliance is difficult to achieve," suggesting that the existing system imposes undue hardship on wage earners who depend heavily on tips, the Arizona House of Representatives noted.