Richard Hudson, Representative of North Carolina, expressed his support for eliminating taxes on tips, highlighting the potential benefits for families, workers, and small businesses. He made this statement on the social media platform X.
“Proud to stand with House Republicans and President Trump to pass No Taxes on Tips as part of the One Big Beautiful Bill,” said Richard Lane Hudson, U.S. Representative from North Carolina. “This commonsense change is already helping families, workers, and small businesses across North Carolina. Working to support and protect small businesses is something I am both privileged and eager to do.”
The “No Tax on Tips” proposal has become a significant topic in federal tax discussions as lawmakers consider whether gratuities should be excluded from federal income taxes to assist service workers. In 2024 and 2025, Congress examined versions of the “Tax Free Tips Act,” raising questions about fairness between tipped and non-tipped employees, potential revenue losses, and Internal Revenue Service (IRS) enforcement. The Congressional Research Service reported that this proposal is part of a broader conversation about labor incentives and equity in tax policy.
According to Yale’s Budget Lab, approximately 4 million Americans, or about 2.5% of the workforce in 2023, were employed in tipped occupations such as waitstaff, bartenders, and barbers. This group would be most directly affected by any policy exempting tips from taxation. The relatively small share underscores how targeted the “No Tax on Tips” proposal would be.
The economic impact of exempting tips from taxation varies significantly by state due to differences in how tipped employment is distributed and how states align with federal tax codes. For instance, Nevada has over 5% of its workforce in tipped jobs, while Washington D.C. and Colorado have less than 1%, leading to varying local impacts. According to the Tax Policy Center, Montana estimated that its exemption reduced revenue by about $6 million in 2021, illustrating the fiscal implications.
Hudson has represented North Carolina in the U.S. House since 2013 and serves as Chair of the National Republican Congressional Committee. Before his election to Congress, he was communications director for the North Carolina Republican Party and worked as a congressional staffer for several GOP representatives. His background includes small business ownership and long-term involvement in Republican campaign strategy.
