Montana Senate Bill 399, which went into effect on January 1, 2024, has caused distress among service industry workers in the state. This bill requires tips to be reported alongside state taxes, leading to financial concerns for workers who rely on tips to make a living. The introduction of SB399 by Senator Greg Hertz aims to level the playing field by ensuring that all income, including tip income, is taxable. Despite the bill not impacting tax returns until 2025, service industry workers like John Wand, a server at Stella’s Kitchen & Bakery, are already feeling the pressure of potential financial insecurity due to the changes.
The bill’s effects are causing workers like Wand to consider seeking additional employment in order to secure their financial futures. SB399 will mean that tip income is taxable, requiring workers to report tips and pay additional state taxes. While supporters of the bill, such as Senator Hertz, argue that it will benefit Montana taxpayers and help them save money, service industry workers are left grappling with the potential financial repercussions. As the bill imposes changes to the income tax structure in Montana, workers in the service industry, who rely on tips as a significant portion of their income, are feeling the burden of these new regulations.
Wand shared his concerns about the changes, highlighting how employees at Stella’s have shared tips with non-tipped employees through a tip-pooling system. He expressed frustration over the perceived unfairness of the changes, while the owner of Stella’s also emphasized the impact of the bill, estimating that workers would owe an additional $5.90 in state taxes for every $100 of tip income reported. As the impact of Senate Bill 399 unfolds, it is leaving service workers worried about how the changes to the income tax system in Montana will ultimately affect their livelihoods and financial stability.