AB 483

This bill allows the employer of a tipped employee to retain the state sales taxes

that the employer collects during any sales tax reporting period if, during that

period, the employer establishes by the employer's payroll records that at least 5

percent of the wages that the employer pays to tipped employees is derived from tips

and that the employer pays the tipped employees not less than the minimum wage

of $7.25 per hour, not including tips. If the employer retains the taxes for any period

for which the employer cannot establish the criteria for retaining the taxes, the

employer must pay a penalty to the Department of Revenue equal to $500 for the first

violation and 200 percent of the taxes for each subsequent violation. After the third

violation, the employer is not eligible for retaining the taxes for 48 months following

the date of the violation. The same penalties apply for any subsequent period of

eligibility.

Under current law, generally, if an employer of a tipped employee establishes

that, when adding the tips received by the tipped employee to the wages paid to the

tipped employee, the tipped employee receives not less than the applicable minimum

wage (generally $7.25 per hour), the minimum wage for the tipped employee is $2.33

per hour.