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Nixon signs tip tax bill

JEFFERSON CITY, Mo. – Gov. Jay Nixon signed SB 336 yesterday, which seeks to protect businesses from false personal income tax reports from employees.

“Should Missouri businesses be held accountable when their employees falsely report their personal income tax?” asked the Missouri Chamber of Commerce in a statement. “A recent practice by the Missouri Department of Revenue was doing just that—forcing restaurants and other businesses to make up for lost state revenue when their employees didn’t properly report their tipped income.”


SB 336 was sponsored by Sen. Will Kraus, a Republican from Lee’s Summit.

“When a state department attempts to raise revenue by attacking our job creators it is our job to protect them,” said Sen. Kraus. “I appreciate the Governor standing with the Missouri general assemble in protecting our business owners from these attacks. It is imperative we protect Missouri’s job creators.”

Previously, the Department of Revenue could hold employers responsible for tips in which their employees underreported. Once SB 336 goes into law, employers will only be held responsible for income taxes in which their employees have claimed.

“It is common sense. You pay taxes on what you earn, not on what the Department of Revenue thinks you earn through a formula” continued Kraus. This legislation provides safeguards for Missouri businesses in helping keep their doors open and Missouri’s economy growing.”

SB 336 attempts to clarify Missouri’s tax statutes on this matter to ensure employees are accountable for their personal income tax liabilities, as opposed to the place of employment.

“In this instance, the revenue department’s actions were as nonsensical and as hostile to small business as we’ve seen in a long time. Missouri business leaders understand the importance of paying taxes and contributing to state revenue, but it’s way over the line to expect businesses to pay their employees’ personal tax bills,” said Daniel P. Mehan, Missouri Chamber president and CEO. “On behalf of the state’s business community, I’d like to thank the General Assembly for making this a priority and for passing this bill with broad bi-partisan support.”