Bill > HB2173

This bill modifies Missouri income tax regulations by adding a new provision that allows tipped employees to completely exclude their tips from state income tax starting January 1, 2027. Specifically, the bill defines "tips" using the federal Fair Labor Standards Act definition and "tipped employee" as someone who customarily and regularly receives tips. The legislation eliminates state income tax withholding requirements for tips, except as mandated by federal law. This change means that servers, bartenders, and other workers who receive tips will not have to pay Missouri state income tax on those earnings. The bill is part of a larger section detailing various modifications to Missouri's income tax calculations, and it represents a significant tax benefit for workers in service industries who rely on tips as a substantial portion of their income. By removing the state tax burden on tips, the legislation aims to provide financial relief to tipped employees.

https://house.mo.gov/Bill.aspx?bill=HB2173&year=2026&code=R