Stingy tippers, steep taxes: California and Washington state anchor the bottom of the tipping charts

Restaurant-goers in California, Washington state and the District of Columbia are tipping less than almost anyone else in the country, and the pattern is showing up right alongside a wave of newly enacted and proposed taxes on high earners in two of those jurisdictions.

Nationwide, diners left 19.3% on average at full-service restaurants through the first quarter of 2026, according to data tracked quarterly by the payments and point-of-sale company Toast. The state-by-state rankings use a different, blended measure — “overall” tips, which combine full-service and quick-service transactions and are calculated as total tips divided by total processing volume, so they run a few points lower than the full-service-only national figure and aren’t directly comparable to it. By that overall measure, Delaware leads the country at 22.1%, while California sits at the bottom at 17.3%, with Washington state (17.8%) and the District of Columbia (17.5%) close behind. West Virginia, New Hampshire and Indiana round out the top tier, each above 20% overall.

The low-tipping states also tend to be places with high mandated minimum wages for restaurant workers, which may partly explain the gap — tipped employees in California and Washington are entitled to the full state minimum wage on top of whatever customers leave, unlike many of the high-tipping states, which allow a lower base wage for tipped workers. Toast’s figures come only from restaurants that use its card and digital payment platform and do not capture cash tips.

The tipping divide comes as national attitudes toward gratuities have soured. A Bankrate survey released last year found 63% of Americans hold at least one negative view of tipping, and 41% said tipping culture has “gotten out of control” — up from 35% the year before. Even so, the survey found actual tipping behavior has largely stabilized after several years of decline.

A widening tax divide

The tipping gap has opened during a stretch in which both California and Washington have moved to raise taxes on their highest earners, prompting a string of high-profile departures.

Washington Gov. Bob Ferguson, a Democrat, signed a law in March imposing a 9.9% tax on household income above $1 million, ending the state’s decades-long status as one of the few in the country with no personal income tax. The measure is expected to generate roughly $3 billion a year starting in 2029 and is already facing a court challenge from opponents who argue it violates the state constitution.

In California, voters will decide in November on a ballot measure, Proposition 40, that would impose a one-time 5% tax on the net worth of residents worth more than $1 billion. Backers say the measure would raise roughly $100 billion for the state’s Medicaid program and other services, though the state’s nonpartisan Legislative Analyst’s Office puts the realistic haul at “tens of billions of dollars” spread over several years, cautioning that the true total is hard to pin down given how much of that wealth is tied to fluctuating stock prices. Democratic Gov. Gavin Newsom opposes the measure, warning it could accelerate an exodus of wealthy residents the state can’t afford to lose.

Several prominent figures have made high-profile moves in the same direction, though their stated reasons vary and aren’t always tied explicitly to the new taxes. Former Starbucks Chief Executive Howard Schultz announced in March that he and his wife were leaving Seattle for Miami after more than four decades in Washington state — timing that coincided with state lawmakers advancing the new income tax, though Schultz did not cite the tax directly and described the move as part of his retirement. Tesla and SpaceX chief Elon Musk relocated his personal residence from California to Texas in 2020, citing frustration with the state, and has since moved both companies’ headquarters there as well. He joins a broader list of billionaires and corporations — including Chevron, Oracle and Charles Schwab — that have shifted operations to lower-tax states such as Texas and Florida in recent years.

A different approach in Seattle

Seattle’s new mayor has staked out a very different response to affordability concerns. Katie Wilson, a democratic socialist who was sworn in this year, proposed during her campaign that the city explore a “public option” for groceries — government-run stores intended to backfill neighborhoods where corporate chains have closed locations. Ms. Wilson said she would work with the grocery workers’ union UFCW 3000 on the concept, arguing that food access “is a basic right.” Critics have called the idea unworkable, noting that government-run grocery pilots in other cities have struggled financially.

A federal break for tipped workers

While states debate how to tax the wealthy, tipped workers nationally received a federal tax break last year. President Trump signed the One Big Beautiful Bill Act on July 4, 2025, which created a federal income tax deduction of up to $25,000 for tips earned in occupations that traditionally receive them, running through 2028. The deduction phases out for individuals earning more than $150,000. It does not eliminate payroll taxes on tips or exempt them from state income taxes.

Whether that federal change moves the needle on tipping generosity in high-tax, low-tipping states like California and Washington remains to be seen — Toast’s next quarterly report is expected this fall.