EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1005*
HOUSE BILL 1005
Q3 5lr2505
By: Delegates Fisher, Arentz, Arikan, Chisholm, Grammer, Hutchinson,
M. Morgan, Nawrocki, Rose, Schmidt, Szeliga, and Valentine
Introduced and read first time: January 31, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Income Tax – Tips or Gratuities – Subtraction Modification 2
(No Income Taxes on Tips Act) 3
FOR the purpose of providing a subtraction modification under the Maryland income tax 4
for compensation received in the form of a tip or gratuity for the performance of 5
certain work; and generally relating to a subtraction modification under the 6
Maryland income tax for compensation received in the form of a tip or gratuity. 7
BY repealing and reenacting, without amendments, 8
Article – Tax – General 9
Section 10–207(a) 10
Annotated Code of Maryland 11
(2022 Replacement Volume and 2024 Supplement) 12
BY adding to 13
Article – Tax – General 14
Section 10–207(qq) 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2024 Supplement) 17
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
That the Laws of Maryland read as follows: 19
Article – Tax – General 20
10–207. 21
(a) To the extent included in federal adjusted gross income, the amounts under 22
this section are subtracted from the federal adjusted gross income of a resident to determine 23
Maryland adjusted gross income. 24 2 HOUSE BILL 1005
(QQ) (1) (I) IN THIS SUBSECTION THE FOLLOWING WORDS HAVE THE 1
MEANINGS INDICATED . 2
(II) “FOOD SERVICE FACILITY ” HAS THE MEANING STATED IN § 3
21–301 OF THE HEALTH – GENERAL ARTICLE. 4
(III) “HOTEL” MEANS AN ESTABLISHME NT THAT OFFERS 5
SLEEPING ACCOMMODATI ONS FOR COMPENSATION . 6
(IV) “PROVIDING PASSENGER –FOR–HIRE SERVICES ” MEANS 7
PROVIDING LIMOUSINE SERVICES , SEDAN SERVICES , OR TRANSPORTATION 8
NETWORK SERVICES IN ACCORDANCE WITH TITLE 10 OF THE PUBLIC UTILITIES 9
ARTICLE. 10
(V) “PROVIDING TAXICAB SER VICES” MEANS PROVIDING 11
TAXICAB SERVICES IN ACCORDANCE WITH TITLE 10 OF THE PUBLIC UTILITIES 12
ARTICLE. 13
(2) THE SUBTRACTION UNDER SUBSECTION (A) OF THIS SECTION 14
INCLUDES ANY COMPENSATION REC EIVED IN THE FORM OF A TIP OR GRATUITY FOR: 15
(I) EMPLOYMENT IN A FOOD SERVICE FACILITY ; 16
(II) EMPLOYMENT IN A BUSI NESS LICENSED FOR ON –SALE 17
CONSUMPTION OF AN ALCOHOLIC BEVERAG E IN ACCORDANCE WITH THE 18
ALCOHOLIC BEVERAGES AND CANNABIS ARTICLE; 19
(III) EMPLOYMENT IN A HOTE L; 20
(IV) PROVIDING PASSENGER –FOR–HIRE SERVICES; OR 21
(V) PROVIDING TAXICAB SE RVICES. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
1, 2025, and shall be applicable to all taxable years beginning after December 31, 2024. 24