Tip Income Tax Exemption Bill Vetoed
Summary
Wisconsin Governor vetoed SB36 on April 6, 2026, which would have created a state income tax exemption for cash tips paid to employees. The bill passed the Senate 21-12 and Assembly 60-31 but was rejected by the Governor. Wisconsin employers and tipped workers remain subject to existing tip reporting requirements under Wis. Stat. § 71.63.
What changed
Wisconsin SB36, which proposed creating an income tax exemption for cash tips paid to employees under Wis. Stat. § 71.05 and § 71.63, was vetoed by the Governor on April 6, 2026. The bill would have exempted cash tips from state income tax and contained fiscal estimate (FE) designation. Despite bipartisan sponsorship and passage through both chambers (Senate 21-12, Assembly 60-31), the veto preserves existing tip reporting and taxation requirements for Wisconsin employers and service industry workers.
Wisconsin employers in the food service and retail sectors should continue complying with current tip reporting obligations under Wisconsin law. The vetoed legislation would have affected how tipped employees report income for state tax purposes; since the bill did not become law, no changes to withholding, reporting, or recordkeeping requirements are needed. Employers should monitor for future legislative sessions that may reintroduce similar proposals.
Source document (simplified)
ChangeBridge / Wisconsin / SB36 Vetoed SB36 Senate Bill Vetoed 2026-04-06
An income tax exemption for cash tips paid to an employee. (FE)
An Act to repeal 71.63 (6) (n) 1. and 71.63 (6) (n) 2.; to renumber and amend 71.63 (6) (n) (intro.); to amend 71.05 (6) (b) 19. cm., 71.05 (6) (b) 19. dm., 71.05 (6) (b) 28. e., 71.05 (6) (b) 28. f., 71.05 (6) (b) 32. b., 71.05 (6) (b) 32. c., 71.05 (6) (b) 33. b., 71.05 (6) (b) 33. c., 71.05 (6) (b) 35. c., 71.05 (6) (b) 35. d., 71.05 (6) (b) 38. c., 71.05 (6) (b) 38. d., 71.05 (6) (b) 42. c., 71.05 (6) (b) 42. d. and 71.05 (6) (b) 43. f.; to create 71.05 (1) (j) of the statutes; Relating to: an income tax exemption for cash tips paid to an employee. (FE)
Bill Details
State Wisconsin
Session 2025-2026 Regular Session
Chamber Senate
Official Source docs.legis.wisconsin.gov/2025/proposals/re...
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Sponsors
Andre Jacque (Sen - R) Julian Bradley (Sen - R) Rob Hutton (Sen - R) Rachael Cabral-Guevara (Sen - R) Dan Feyen (Sen - R) Steve Nass (Sen - R) Romaine Quinn (Sen - R) Cory Tomczyk (Sen - R) Ron Tusler (Rep - R) Elijah Behnke (Rep - R) Chanz Green (Rep - R) Rick Gundrum (Rep - R) Rob Kreibich (Rep - R) Dave Maxey (Rep - R) Jeffrey Mursau (Rep - R) William Penterman (Rep - R) Jim Piwowarczyk (Rep - R) Paul Tittl (Rep - R) Travis Tranel (Rep - R) Chuck Wichgers (Rep - R)
Action History
2026-04-06 S Report vetoed by the Governor on 4-3-2026 2026-04-02 S Presented to the Governor on 4-2-2026 2026-02-25 S Report correctly enrolled 2026-02-23 S Received from Assembly concurred in 2026-02-19 A Ordered immediately messaged 2026-02-19 A Read a third time and concurred in, Ayes 60, Noes 31 2026-02-19 A Rules suspended 2026-02-19 A Ordered to a third reading 2026-02-19 A Read a second time 2026-02-19 A Rules suspended to withdraw from Senate message and take up 2026-02-19 A Read 2026-01-22 A Received from Senate 2026-01-21 S Ordered immediately messaged 2026-01-21 S Read a third time and passed, Ayes 21, Noes 12 2026-01-21 S Rules suspended to give bill its third reading 2026-01-21 S Ordered to a third reading 2026-01-21 S Senate Substitute Amendment 4 adopted 2026-01-21 S Decision of the Chair stands as the judgment of the Senate, Ayes 18, Noes 15 2026-01-21 S Point of order that Senate Amendment 1 to Senate Substitute Amendment 4 was not germane well taken 2026-01-21 S Read a second time 2026-01-21 S Senate Amendment 1 to Senate Substitute Amendment 4 offered by Senators Hesselbein, Smith, Spreitzer, Drake, Carpenter, Dassler-Alfheim, Habush Sinykin, L. Johnson, Keyeski, Larson, Pfaff, Ratcliff, Roys, Wall and Wirch 2026-01-16 S Placed on calendar 1-21-2026 pursuant to Senate Rule 18(1) 2026-01-15 S Representative Steffen added as a cosponsor 2026-01-14 S Available for scheduling 2026-01-14 S Report passage as amended recommended by Joint Committee on Finance, Ayes 12, Noes 4 2026-01-14 S Report adoption of Senate Substitute Amendment 4 recommended by Joint Committee on Finance, Ayes 12, Noes 4 2026-01-14 S Report introduction of Senate Substitute Amendment 4 by Joint Committee on Finance, Ayes 16, Noes 0 2026-01-14 S Executive action taken 2026-01-13 S Withdrawn from committee on Senate Organization and rereferred to joint committee on Finance pursuant to Senate Rule 46(2)(c) 2025-11-12 S Report of Joint Survey Committee on Tax Exemptions received, Ayes 5, Noes 4 2025-10-23 S Report of Joint Survey Committee on Tax Exemptions requested 2025-09-19 S Available for scheduling 2025-09-19 S Report passage as amended recommended by Committee on Agriculture and Revenue, Ayes 5, Noes 3 2025-09-19 S Report adoption of Senate Substitute Amendment 3 recommended by Committee on Agriculture and Revenue, Ayes 6, Noes 2 2025-09-18 S Executive action taken 2025-09-03 S Fiscal estimate received 2025-08-18 S Senate Substitute Amendment 3 offered by Senator Jacque 2025-08-07 S Senate Substitute Amendment 2 offered by Senator Jacque 2025-07-02 S Representative Melotik added as a cosponsor 2025-06-09 S Senate Substitute Amendment 1 offered by Senator Jacque 2025-05-21 S Public hearing held 2025-02-28 S Fiscal estimate received 2025-02-18 S Representative Gustafson added as a cosponsor 2025-02-12 S Read first time and referred to Committee on Agriculture and Revenue 2025-02-12 S Introduced
Votes
2026-01-21 Senate: Decision of the Chair stands as the judgment of the Senate Yea: 18 Nay: 15 2026-01-21 Senate: Read a third time and passed Yea: 21 Nay: 12 2026-02-19 Assembly: Read a third time and concurred in Yea: 60 Nay: 31
Committee Referrals
2025-02-12 S Agriculture and Revenue 2026-01-13 J Finance
Amendments
2025-06-09 Senate Substitute Amendment 1 2025-08-07 Senate Substitute Amendment 2 2025-08-18 Senate Substitute Amendment 3 2026-01-14 Senate Substitute Amendment 4 2026-01-21 Senate Amendment 1
Bill Text Versions
2025-02-12 Introduced 0000-00-00 Enrolled Legislative data powered by LegiScan (CC BY 4.0)
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