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

HB 1005 modifies Maryland's income tax code to exclude tips or gratuities from taxable income for workers in specific service industries. It directly affects employees in food service facilities (like restaurants), businesses serving alcohol, hotels, and providers of passenger-for-hire or taxicab services. The bill adds a new provision (Section 10-207(qq)) defining these industries and specifying that tips received in these roles are subtracted from federal adjusted gross income for Maryland tax purposes. This change takes effect July 1, 2025, applying to tax years beginning after December 31, 2024. The policy removes tips from taxable income for these workers, reducing their Maryland income tax liability.