H3251 would amend Massachusetts tax law to exclude tips received by employees from taxable income. Specifically, it adds a new deduction/exclusion in Chapter 62 of the General Laws for the net amount of Part B adjusted gross income received as tips by an employee under the state wage law definition in Chapter 149, section 152A. In practical terms, the bill would reduce state income tax liability for tipped workers by removing tip income from the tax base.
The bill is narrowly focused on tipped wages and does not alter federal tax law or broader wage-and-hour rules. Its effect would be to create a Massachusetts-specific tax preference for workers in occupations that commonly rely on gratuities, such as restaurant servers, bartenders, delivery workers, and other service employees who receive tips.
Impact
If enacted, the bill would amend Chapter 62 of the Massachusetts General Laws by creating a new income tax exclusion for tips, thereby changing how taxable income is calculated for affected employees. The measure would reduce state tax revenue to the extent that tipped income is currently taxed, while increasing after-tax income for workers who receive tips. It would primarily affect tipped employees and, indirectly, employers and payroll/tax reporting practices tied to those workers' compensation.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the available record shows a straightforward policy proposal with no documented opposition or support in the provided materials. The filing suggests interest from the sponsor and several co-sponsors, indicating at least some legislative support for tax relief for tipped workers. No committee debate or vote history is available here to show broader sentiment.
Contention
The main policy tension is between providing tax relief to tipped workers and the resulting loss of state tax revenue. Supporters are likely to view the bill as a targeted benefit for lower- and middle-income service workers whose earnings can be volatile and dependent on customer gratuities. Potential critics may question whether excluding tips from taxable income creates inequity compared with other wage earners, complicates tax administration, or reduces revenue without a broader offset. No specific objections are recorded in the provided discussion materials.