Advocacy in Action | October 2, 2025
Guidance Released Outlining No Tax on Tips Eligibility
The Department of Treasury released proposed guidance outlining who will be eligible for the $25,000 No Tax on Tips credit and what kind of tips qualify toward the credit.
Restaurant workers are widely eligible for this deduction but only if the income qualifies as a voluntary tip, not a mandatory service charge. That distinction is critical for operators managing large party fees and service models.
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Qualified tips must be voluntary, determined by the customer, and not dictated by employer policy.
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Service charges, like automatic gratuities for large parties, do not qualify.
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Operators may need to rethink service fee practices to ensure workers benefit from the deduction.
Treasury’s proposed guidance is open for comments until October 22. The National Restaurant Association plans to submit comments and participate in the Treasury’s public hearing on October 23.
Webinar: New Rules for No Tax on Tips and No Tax on Overtime Premium Pay
🗓️ Wednesday, October 15, 2025
🕑 2PM
👉 Register Here
Join Aaron Frazier, Vice President of Public Policy, for this informational webinar designed to guide restaurant operators through what’s changing and what to expect in 2026.
The new rules will help operators explain to their employees who will be eligible for the credits and how the credits are going to work. It will also help operators understand any new reporting responsibilities.
National Restaurant Association: Comments Submitted for Relief from State-Level Regulations
Our partners at The National Restaurant Association submitted comments Sept. 16 to the Department of Justice in response to its request for information on state laws that may negatively affect the national economy or interstate commerce.
Restaurants across the country are facing an increasingly complex patchwork of state and local regulations that threaten affordability, supply chain stability, and business viability. The Association’s comments highlight how fragmented laws, from food ingredient bans to climate disclosure mandates, are driving up costs and creating compliance challenges for operators, particularly those with multi-state footprints.
Without federal leadership, the Association warns, fragmented regulations will continue to harm restaurants, small businesses, and consumers, and is calling for clarity, consistency, and reform to protect the industry’s role in the national economy.
Essential Workers for Economic Advancement Act (EWEA)
Reps. Lloyd Smucker (R-PA) and Henry Cuellar (D-TX) have reintroduced the Essential Workers for Economic Advancement Act (EWEA). The bill would establish a new H-2C visa designed to help the restaurant industry address ongoing workforce shortages. With more than 15.5 million employees in over 1 million establishments, restaurants are the nation’s second-largest private-sector employer. Yet, 59% of operators struggle to fill job openings, and one-third report insufficient staff to meet customer demand.
The EWEA program would create a non-immigrant temporary worker pathway to fill roles that do not require a college degree. Employers must verify that positions remain unfilled after offering them to U.S. workers, and all participants must use E-Verify. Workers would have opportunities to move between qualified roles, pursue advancement, and gain skills transferable across industries. The program would be available to 65,000 workers with the possibility of growing to 85,000.
The program differs from existing workforce visas in its structure and limitations. As an example, it prohibits family members from joining participants in the U.S., authorizes an initial 3-year stay with a maximum 3-year extension, and includes a flexible cap based on market demand.
25% of EWEA slots are reserved for businesses that:
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Promote nationally recognized employee safety and health programs.
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Hire workers under the Work Opportunity Tax Credit (WOTC).
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Operate with comparatively low sales per employee.
Tax Law Changes Could Harm Food Donations
Changes in the tax law could unintentionally harm food donation efforts. The law introduces a "1% Charitable Deduction Floor," allowing corporations to deduct only charitable contributions exceeding 1% of their taxable income. While this provision was intended for cash and stock donations, its broad application also affects in-kind contributions and, as a result, many donations of food from restaurants and grocery stores would not qualify.
The National Restaurant Association and other industry leaders are working with lawmakers to address the problem.
FDA Proposes Ban on Rarely Used Orange B Food Dye
The FDA is now proposing to ban the use of the artificial food dye Orange B, which hasn’t been used by food manufacturers since around 1978, citing that its approval for coloring meat casings is now obsolete.
The agency says the regulation is “outdated and unnecessary,” and sees little risk of industry resistance given how rarely the dye is used. Under this current approach, the FDA is targeting marginal additives like Orange B and preparing to revoke approval of others, that includes Citrus Red No. 2, rather than attempting sweeping bans on more widely used artificial colors.
Related: The Trump Administration released its Make America Healthy Again (MAHA) Strategy report, featuring over 120 federal actions to tackle childhood chronic disease, nutrition, and public health.