Green Bay Reporter

A bill authored by State Rep. Elijah R. Behnke in the Wisconsin Assembly aims to exempt cash tips from state income tax, aligning tax obligations more closely with employees’ regular wages and salaries, according to the Wisconsin State Assembly.

According to the Wisconsin State Legislature's official website, the bill was described as follows: "an income tax exemption for cash tips paid to an employee. (FE)".

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill creates an income tax exemption for cash tips received by employees from the customers of their employers. The proposed change to the tax code would modify the applicable statutes to ensure that cash tips are not included in the state income taxable amounts for employees, aligning tax obligations more closely with their regular wages and salaries. The amendments to existing statutes reflect adjustments for nonresident and part-year resident individuals in how wages, salaries, tips, unearned income, and net earnings from trade or business are calculated, ensuring these changes apply to both separate and joint filers, while the reductions in taxable amounts take into consideration an individual's aggregate income subject to state taxation. This act is set to first apply to taxable years beginning after Dec. 31, 2024.

The bill was co-authored by Senator André Jacque (Republican-1st District), Representative Chanz J. Green (Republican-74th District), Representative Rick Gundrum (Republican-58th District), Representative Nate L. Gustafson (Republican-55th District), and Representative Rob Kreibich (Republican-28th District). It was co-sponsored by Senator Julian Bradley (Republican-28th District), Senator Rachael Cabral-Guevara (Republican-19th District), and Senator Dan Feyen (Republican-20th District), along with 11 other co-sponsors.

Elijah R. Behnke has co-authored or authored another 19 bills since the beginning of the 2025 session, with none of them being enacted.

Behnke graduated from Toccoa Falls College in 2005 with an AA.

Behnke, a Republican, was elected to the Wisconsin State Assembly in 2025 to represent the state's 6th Assembly district, replacing previous state representative Peter Schmidt.

In Wisconsin, the legislative process starts when a senator, constituent, group, or agency proposes an idea for a bill. After drafting, the bill is introduced, numbered, and referred to a committee for review and public input. If approved, it moves through three readings and votes in both the Senate and Assembly. Once both chambers pass the same version, the bill goes to the governor, who can sign it, veto it, or let it become law without a signature. Only a small share of bills introduced each session ultimately become law. You can learn more about the Wisconsin legislative process here.

Bill Number	Date Introduced	Short Description
AB38	02/17/2025	An income tax exemption for cash tips paid to an employee. (FE)
AB36	02/17/2025	Law enforcement and firefighter annuitants in the Wisconsin Retirement System who are rehired by a participating employer. (FE)
AB30	02/17/2025	Prohibiting a foreign adversary from acquiring agricultural or forestry land in this state
AB26	02/17/2025	Battery or threat to jurors and providing a penalty
AB18	02/06/2025	Fee waivers for state park vehicle admission receipts to pupils with Every Kid Outdoors passes. (FE)
AB4	02/03/2025	Required instruction in civics in the elementary and high school grades, high school graduation requirements, and private school educational program criteria. (FE)
AB3	02/03/2025	Incorporating cursive writing into the state model English language arts standards and requiring cursive writing in elementary grades. (FE)