HB0201 • 2026

Income Tax - Tips or Gratuities - Subtraction Modification (No Income Taxes on Tips Act)

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Delegates Fisher , Arikan , Chisholm , Grammer , M. Morgan , Nawrocki , and Szeliga
Last action: 2026-01-15
Official status: In the House - Hearing 1/29 at 1:00 p.m.
Effective date: 2026-07-01

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Income Tax - Tips or Gratuities - Subtraction Modification (No Income Taxes on Tips Act)

Providing a subtraction modification under the Maryland income tax for compensation received in the form of a tip or gratuity for the performance of certain work in a food service facility, business licensed for on-sale consumption of alcoholic beverages, or hotel, for providing passenger-for-hire services, or for providing taxicab services; and applying the Act to taxable years beginning after December 31, 2025.

What This Bill Does

Providing a subtraction modification under the Maryland income tax for compensation received in the form of a tip or gratuity for the performance of certain work in a food service facility, business licensed for on-sale consumption of alcoholic beverages, or hotel, for providing passenger-for-hire services, or for providing taxicab services; and applying the Act to taxable years beginning after December 31, 2025.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Bill History

2026-01-15 House
Hearing 1/29 at 1:00 p.m.
2026-01-14 House
First Reading Ways and Means
2025-10-31 House
Pre-filed
Maryland General Assembly
Text - First - Income Tax - Tips or Gratuities - Subtraction Modification (No Income Taxes on Tips Act)

Official Summary Text

Providing a subtraction modification under the Maryland income tax for compensation received in the form of a tip or gratuity for the performance of certain work in a food service facility, business licensed for on-sale consumption of alcoholic beverages, or hotel, for providing passenger-for-hire services, or for providing taxicab services; and applying the Act to taxable years beginning after December 31, 2025.

Current Bill Text

Read the full stored bill text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0201*

HOUSE BILL 201
Q3 6lr1549
HB 1005/25 – W&M (PRE–FILED)
By: Delegates Fisher, Arikan, Chisholm, Grammer, M. Morgan, Nawrocki, and
Szeliga
Requested: October 31, 2025
Introduced and read first time: January 14, 2026
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 2025 Supplement) 12

BY adding to 13
Article – Tax – General 14
Section 10–207(rr) 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2025 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

2 HOUSE BILL 201

(a) To the extent included in federal adjusted gross income, the amounts under 1
this section are subtracted from the federal adjusted gross income of a resident to determine 2
Maryland adjusted gross income. 3

(RR) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 4
MEANINGS INDICATED. 5

(II) “FOOD SERVICE FACILITY” HAS THE MEANING STATED IN § 6
21–301 OF THE HEALTH – GENERAL ARTICLE. 7

(III) “HOTEL” MEANS AN ESTABLISHME NT THAT OFFERS 8
SLEEPING ACCOMMODATIONS FOR COMPENSATION. 9

(IV) “PROVIDING PASSENGER –FOR–HIRE SERVICES ” MEANS 10
PROVIDING LIMOUSINE SERVICES, SEDAN SERVICES , OR TRANSPORTATION 11
NETWORK SERVICES IN ACCORDANCE WITH TITLE 10 OF THE PUBLIC UTILITIES 12
ARTICLE. 13

(V) “PROVIDING TAXICAB SER VICES” MEANS PROVIDING 14
TAXICAB SERVICES IN ACCORDANCE WITH TITLE 10 OF THE PUBLIC UTILITIES 15
ARTICLE. 16

(2) THE SUBTRACTION UNDER SUBSECTION (A) OF THIS SECTION 17
INCLUDES ANY COMPENSATION RECEIVED IN THE FORM OF A TIP OR GRATUITY FOR: 18

(I) EMPLOYMENT IN A FOOD SERVICE FACILITY; 19

(II) EMPLOYMENT IN A BUSI NESS LICENSED FOR ON –SALE 20
CONSUMPTION OF AN AL COHOLIC BEVERAGE IN ACCORDANCE WITH THE 21
ALCOHOLIC BEVERAGES AND CANNABIS ARTICLE; 22

(III) EMPLOYMENT IN A HOTEL; 23

(IV) PROVIDING PASSENGER–FOR–HIRE SERVICES; OR 24

(V) PROVIDING TAXICAB SERVICES. 25

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 26
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 27