Sent to governor: Bill to protect employers from tip tax disputes

When employees falsely report their income during tax time, common sense says that state collectors should go after the worker, not the employer.

However, when it comes to tipped workers, the Missouri Department of Revenue has been trying to collect back taxes from restaurants when employees fail to report all their tipped income.

A bill passed by the Missouri General Assembly would end this practice. Senate Bill 336 has been sent to the governor’s desk. The bill would make it clear that employers are not liable for dishonest tax filings made by their tipped employees.

The bill is sponsored by Sen. Will Kraus, a Republican from Lee’s Summit. Sen. Kraus filed the bill this session after it came to light that the revenue department had started reviewing restaurant tip records. The department is calculating the tip percentage on credit card receipts and comparing that to the cash tip percentage restaurant employees are reporting as income. When the percentages show a discrepancy, the department is going after restaurants to make up the difference.

The bill received broad bipartisan support in both the House and Senate. The Missouri Chamber is urging Gov. Jay Nixon to sign the bill.

For more information about tax issues, contact Tracy King, vice president of governmental affairs, at or by phone at 573-634-3511.

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About mochamber

The Missouri Chamber of Commerce and Industry understands that the quality of life in our state depends on quality jobs for Missourians. To that end, we have one simple mission: to protect and advance Missouri business.

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