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flag Virginia Governor proposes exempting service tips from state income tax, benefiting over 250,000 workers.

flag Virginia Governor Glenn Youngkin has proposed a budget that would exempt service tips from state income tax, potentially returning $70 million annually to over 250,000 workers in food service, personal service, and hospitality. flag The proposal, which needs approval from the General Assembly, would allow workers to claim a tax deduction for tips, as long as the income is reported on their federal return. flag Economists warn some employers might shift more compensation to tips, exploiting the policy.

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