Q: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
SECTION 1. SHORT TITLE.

This Act may be cited as the ''Tip Credit Protection Act of 1999''.

SEC. 2. PREEMPTION.

Section 18 of the Fair Labor Standards Act of 1938 (29 U.S.C. 218)
is amended by adding at the end the following:
''(c) No law, ordinance, regulation, or order established or
enforced by a State or political subdivision of a State shall--
''(1) preclude a tip credit, or
''(2) prohibit an employer from applying a tip credit,
as authorized by section 3(m) if the employer pays cash wages to tipped
employees that are not less than the minimum cash wage required by such
law, ordinance, regulation, or order of a State or political
subdivision of a State on the date of the enactment of this
subsection.''.

SEC. 3. TIPS RECEIVED FOR CERTAIN SERVICES NOT SUBJECT TO INCOME OR
EMPLOYMENT TAXES.

(a) In General.--Section 102 of the Internal Revenue Code of 1986
(relating to gifts and inheritances) is amended by adding at the end
the following new subsection:
''(d) Tips Received for Certain Services.--
''(1) In general.--For purposes of subsection (a), tips
received by an individual for qualified services performed by
such individual shall be treated as property transferred by
gift.
''(2) Qualified services.--For purposes of this subsection,
the term 'qualified services' means cosmetology, hospitality
(including lodging and food and beverage services), recreation,
taxi, newspaper deliveries and shoe shine services.
''(3) Annual limit.--The amount excluded from gross income
for the taxable year by reason of paragraph (1) with respect to
each service provider shall not exceed $10,000.
''(4) Employee taxable on at least minimum wage.--Paragraph
(1) shall not apply to tips received by an employee during any
month to the extent that such tips--
''(A) are deemed to have been paid by the employer
to the employee pursuant to section 3121(q) (without
regard to whether such tips are reported under section
6053), and
''(B) do not exceed the excess of--
''(i) the minimum wage rate applicable to
such individual under section 6(a)(1) of the
Fair Labor Standards Act of 1938 (determined
without regard to section 3(m) of such Act),
over
''(ii) the amount of the wages (excluding
tips) paid by the employer to the employee
during such month.
''(5) Tips.--For purposes of this title, the term 'tips'
means a gratuity paid by an individual for services performed
for such individual (or for a group which includes such
individual) by another individual if such services are not
provided pursuant to an employment or similar contractual
relationship between such individuals.''
(b) Exclusion From Social Security Taxes.--
(1) Paragraph (12) of section 3121(a) of such Code is
amended to read as follows:
''(12)(A) tips paid in any medium other than cash;
''(B) cash tips received by an employee in any calendar
month in the course of his employment by an employer unless the
amount of such cash tips is $20 or more and then only to the
extent includible in gross income after the application of
section 102(d);''.
(2) Paragraph (10) of section 209(a) of the Social Security
Act is amended to read as follows:
''(10)(A) tips paid in any medium other than cash;
''(B) cash tips received by an employee in any calendar
month in the course of his employment by an employer unless the
amount of such cash tips is $20 or more and then only to the
extent includible in gross income after the application of
section 102(d) of the Internal Revenue Code of 1986 for such
month;''.
(3) Paragraph (3) of section 3231(e) of such Code is
amended to read as follows:
''(3) Solely for purposes of the taxes imposed by section
3201 and other provisions of this chapter insofar as they
relate to such taxes, the term 'compensation' also includes
cash tips received by an employee in any calendar month in the
course of his employment by an employer if the amount of such
cash tips is $20 or more and then only to the extent includible
in gross income after the application of section 102(d).''.
(c) Exclusion From Unemployment Compensation Taxes.--Subsection (s)
of section 3306 of such Code is amended to read as follows:
''(s) Tips Not Treated as Wages.--For purposes of this chapter, the
term 'wages' shall include tips received in any month only to the
extent includible in gross income after the application of section
102(d) for such month.''
(d) Exclusion From Wage Withholding.--Paragraph (16) of section
3401(a) of such Code is amended to read as follows:
''(16)(A) as tips in any medium other than cash;
''(B) as cash tips to an employee in any calendar month in
the course of his employment by an employer unless the amount
of such cash tips is $20 or more and then only to the extent
includible in gross income after the application of section
102(d);''
(e) Conforming Amendment.--Sections 32(c)(2)(A)(i) and 220(b)(4)(A)
of such Code are each amended by striking ''tips'' and inserting ''tips
to the extent includible in gross income after the application of
section 102(d))''.
(f) Effective Date.--The amendments made by this section shall
apply to tips received after the calendar month which includes the date
of the enactment of this Act.
A:
Amends the Internal Revenue Code to treat as gift transfers and exclude from gross income and social security and unemployment taxes up to $10,000 annually in tips from qualified services (cosmetology, hospitality, recreation, taxi, newspaper delivery, and shoe shine services).