Bill > SB1153

This bill proposes to exclude tips from state income taxes in Hawaii, specifically for employees who receive more than $30 per month in gratuities. The legislation defines tips as voluntary monetary contributions received from guests, patrons, or customers that are reported to the employer under federal tax law (Title 26 United States Code section 3102). The bill aims to help local small businesses attract qualified employees by providing a tax benefit to workers in tip-based occupations, such as restaurant servers, bartenders, and other service industry professionals. The tax exclusion will apply to gross income, adjusted gross income, and taxable income derived from tips. The Director of Taxation will be responsible for preparing necessary forms, potentially requiring evidence from taxpayers, and adopting rules to implement this new tax provision. The bill is set to take effect for taxable years beginning after December 31, 2025, giving businesses and tax authorities time to prepare for the change.

Labor and Employment

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1153&year=2026