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Senate Urged To Exclude Tips From Business Enterprise Taxes

Hospitality industry advocates are urging lawmakers to exempt employee tips from being calculated into business enterprise taxes.

Adrienne Rupp with the Business and Industry Association says the push back is in response to a rule change by the Department of Revenue Administration.

“Where they have begun applying the BET, the business enterprise tax, to tips earned by employees.”

She testified Tuesday before the Senate Ways and Means Committee on behalf of the association’s restaurants and lodging members.   

She urged members to pass an amendment that would exempt tips from being calculated into the Business Enterprise Tax.

“What you’re doing now is saying this base is actually larger because you’re trying to include tips these employees are earning and really the compensation base is supposed to be based on business enterprise.”

Some businesses have already paid the extra tax, but Rupp says the change would amount to a tax increase for other businesses if the rule is not changed.