RELATING TO TAXATION.

Labor Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: SHIMIZU
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Tax Deduction for Tips Received

This bill allows workers who receive tips to deduct those tips from their income tax.

What This Bill Does

Creates a new section in the Hawaii Revised Statutes allowing tipped employees to deduct tips received during the taxable year from their gross income.
Requires the director of taxation to create forms for claiming this deduction and may ask for proof that the tip was reported to the employer.
Defines 'tips' as voluntary monetary contributions given by guests, patrons, or customers that are reported to the employer under federal law.

Who It Names or Affects

Tipped employees who receive more than $30 a month in tips and report these tips to their employers.

Terms To Know

Tips: Money given voluntarily by customers or guests as a reward for service, which must be reported to the employer under federal law.
Tipped employee: An employee who works in an occupation where they receive more than $30 a month in tips and report these tips to their employer.

Limits and Unknowns

The bill applies only to taxable years starting after December 31, 2025.
It is not clear how many employees will be affected by this change or the financial impact on state revenue.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-01-21 H
Referred to LAB, FIN, referral sheet 2
2025-01-21 H
Introduced and Pass First Reading.
2025-01-17 H
Pending introduction.

Official Summary Text

RELATING TO TAXATION.
Income Tax Deduction; Tips; Tipped Employees; Tax Liability
Provides an income tax deduction for tips received by tipped employees.

Current Bill Text

Read the full stored bill text

HB567

HOUSE OF REPRESENTATIVES

H.B. NO.

567

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to taxation
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
�
Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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"
�235-
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Tips;
tax deduction.
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(a)
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There shall be allowed as a deduction from gross income the amount equal
to the tips received during the taxable year that are included on the tipped
employee's statements furnished to the employer for purpose of the Federal Insurance
Contribution Act, 26 United States Code section 3102.

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(b)
�

The director of taxation shall prepare such forms as may be necessary to
claim a tax deduction under this section, may require proof of the claim for
the tax deduction and adopt rules pursuant to chapter 91.

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(c)
�

For the purposes of this section,

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"Tips" means gratuities or
voluntary monetary contributions received by an employee from a guest, patron,
or customer and that the employee reports to the employer for purposes of the Federal
Insurance Contribution Act, 26 United States Code section 3102.

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"Tipped employee" means an employee
working in an occupation in which the employee receives more than $30 a month
in gratuities.
"

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SECTION 2.
�
New statutory material is underscored.

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SECTION 3.
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This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Income
Tax Deduction; Tips; Tipped Employees; Tax Liability

Description:

Provides
an income tax deduction for tips received by tipped employees.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.