Madison Grab? Tips, OT Still Taxed

Hand placing cash into a tip jar on a counter — Photo: New Africa / Shutterstock

Gov. Tony Evers just vetoed tax relief on tips and overtime, keeping more of working families’ pay in Madison when every dollar counts.

Story Highlights

Evers vetoed bills to exempt tips and overtime from Wisconsin income tax.
He said the overtime bill was unfair between hourly and salaried workers.
He opposed tying a tips exemption to future federal tax changes.
The Wisconsin Supreme Court upheld his “400-year veto,” fueling criticism of broad power.

Evers Blocks Tax Exemptions on Tips and Overtime Pay

On April 3, 2026, Gov. Tony Evers vetoed two Republican bills that would have exempted cash tips and many overtime earnings from Wisconsin income tax. The bills aimed to let service and hourly workers keep more of each paycheck. Supporters called the measures real relief at a time of high costs. The vetoes ensure that tips and overtime remain taxable under state law. The actions sparked sharp pushback from conservatives who framed the bills as help for low and middle income families.

Evers rejected the overtime bill by arguing it would treat workers with similar wages differently. He said the change would favor hourly workers over salaried workers who also work beyond the standard week. His veto message framed the issue as tax code fairness rather than growth or relief. Republican backers countered that overtime is extra work and should not face extra tax. They argued workers deserve immediate relief, not broad debates over theory.

Governor’s Rationale on Tips Tied to State Control

Evers opposed the tips bill because it linked Wisconsin tax policy to possible federal changes. He said that design would hand control of the state tax code to Congress. Backers said the intent was simple: do not tax the tips that waiters, bartenders, and hotel staff earn. The policy fight was less about whether tips deserve relief and more about who sets the rules and how the mechanism would work over time in state law.

The governor’s stance is not perfectly clean-cut. Earlier reporting shows Evers included an effort to eliminate state income tax on cash tips in his own budget proposal for 2025 through 2027. Republicans later moved their own versions and passed stand-alone bills. Those facts weaken claims that he opposes tips relief in principle, while still leaving his April veto as the decisive act that kept taxes on tips in place this session.

Why Conservatives See Missed Relief for Working People

Republican lawmakers and candidates said the vetoes denied direct help to waitstaff, line cooks with pooled tips, truck loaders, and factory workers who make ends meet with overtime. They described the bills as targeted relief during a period of high prices and tight family budgets. They argued the state’s surplus and strong revenue made the exemptions responsible and fair. Their core point was simple: when people work extra hours, the state should not take an extra bite.

The push for simple, direct tax relief also reflects a deeper concern about state overreach. Many Wisconsin families feel nickel-and-dimed by complex rules. Lawmakers said clean exemptions are easier to understand and plan around. They urged a focus on practical gains for households, not blueprints that may shift with future budget deals. Evers’ fairness critique did not sway them. They said freedom and work should be rewarded first, then policy engineers can debate edge cases.

The “400-Year Veto” Still Shapes the Debate

The Wisconsin Supreme Court’s 2025 decision upholding Evers’ “400-year veto” keeps a separate but related issue in view. The court affirmed an expansive partial veto power in budget bills. Critics argue this power lets a governor set policy far past what lawmakers approved. Supporters say the power is lawful and needed for negotiation. The ruling hardened conservative concerns about unchecked executive reach and its long tail on taxes and spending rules.

That legal win for Evers fuels today’s political fight. Opponents connect the dots between broad veto power and blocked tax relief. They say the pattern leans toward higher burdens and more control from Madison. Supporters of Evers point to his budget messages promising wider tax relief with different designs, including earlier mention of removing tax on tips. The record shows real disagreement over method, but the result this spring was clear: no state tax break on tips or overtime.