Republican Tom Emmer is proposing a plan that would eliminate income taxes on some tipped wages. The gubernatorial hopeful is making the proposal one week after he suggested Minnesota a so-called tip credit, which allows businesses to pay workers less than the minimum wage if they earn tips. Emmer now says he wants to exempt from taxes the first $20,000 in tips that waiters and employees collect.
The Emmer campaign says the proposal will cost the state an additional $17 million. But a spokeswoman for the Minnesota Department of Revenue couldn’t say how much Emmer’s plan would cost the state since employees report both wages and tips together on the tax forms.