[Congressional Record Volume 144, Number 52 (Friday, May 1, 1998)]
[Senate]
[Pages S4037-S4038]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BRYAN (for himself and Mr. Reid):
  S. 2027. A bill to clarify the fair tax treatment of meals provided 
hotel and restaurant employees in non-discriminatory employee 
cafeterias; to the Committee on Finance.


                     the working meals fairness act

  Mr. REID. Mr. President, I rise to introduce the Working Meals 
Fairness Act for myself and Senator Bryan, which provides for the 
exemption of meals from consideration as taxable income when provided 
as a benefit to employees of the service sector.
  Mr. President, during the past few days the Finance Committee has 
conducted hearings in which victims of IRS injustice have provided 
poignant testimony of their experiences at the hands of overzealous IRS 
agents. Their testimony has made us all aware that the time has come to 
overhaul the manner in which the IRS deals with the honest law-abiding 
citizens of this country. This overhaul will require a fundamental 
restructuring of the IRS customer service organization and a fresh look 
at what constitutes fairness.
  Mr. President, as part of this fresh look, I am joining Senator Bryan 
today in introducing legislation to remedy an unquestionably unfair tax 
policy resulting from a recent tax court decision. It was a decision in 
support of the IRS' position which is going to have widespread effect 
on the working men and women who are employed by our hotels, 
restaurants and resorts. In short, this decision eliminated the 
deduction for meals provided to service industry employees by their 
employer. Our legislation would reform the manner in which gratuitous 
meals are treated as taxable income under current IRS code.
  Mr. President, all across this country, workers are going to be asked 
to pay taxes to the IRS for the meal they receive while on duty in the 
service industry. These workers often work more than one job, while 
raising a family, and for all intents and purposes play by the rules. 
It isn't enough that these same workers pay transportation costs and 
child care costs to hold these jobs. Now we must tax the hand that 
feeds them. These meals are often provided for the convenience of both 
the employer and employee in order to provide the enhanced customer 
service which has become the hallmark of the service sector in this 
country.
  Mr. President, our legislation, simply put, would exempt any meal, 
provided as a benefit of employment to an employee during their shift 
of duty, from being treated as taxable income.
  Mr. President, this nation depends heavily on the vital contributions 
of the service industry. It is an industry characterized by high 
employee turnover, low wages and in many cases, poor benefits. In order 
to recruit and retain the quality worker that the industry depends 
upon, and we as consumers have come to expect, the provision of a meal 
is the least we can offer. To tax this meal is going a bit too far in 
my judgement. Isn't it ironic that we maintain a policy which costs the 
average service worker $300 a year in additional taxes? Isn't it ironic 
. . . we often tax those who can least afford to pay?
  Mr. President, my job in this body is to stand up for the workers of 
Nevada. I ask my colleagues to stand with me on this matter on behalf 
of workers in their state. Because of policies like

[[Page S4038]]

this, the average American is justified in their perception that the 
rich get richer and the poor stay poor. I therefore ask my colleagues 
in this body to join with me in taking another step on behalf of the 
American worker who sent us here to represent their interests.
  Mr. President, it is time we all ask the IRS to leave the service 
workers of America alone. They are already paying their fair share.
  Mr. President, I request unanimous consent that the Working Meals 
Fairness Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2027

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       Section 119 of the Internal Revenue Code of 1986 is amended 
     by adding the following new subsection:
       (e) In the case of an employee of a hotel or restaurant, 
     gross income shall not include the value of meals furnished 
     to such employee by an employer in a non-discriminatory 
     employee cafeteria located on the business premises of the 
     employer immediately before, immediately after, or during 
     work shifts.
                                 ______