An Act relative to taxes for tipped wages

194th Legislature (2025-2026) Introduced by Marc Lombardo

Bill H 3172 clarifies tipped wages for service employees in Massachusetts, ensuring accurate tax reporting and supporting fair income recognition for workers.

Accompanied a study order, see H5313

Purpose and Intent

Bill H 3172 aims to amend the taxation framework for tipped wages in the Commonwealth of Massachusetts. The primary intent of the bill is to clarify the definition of tipped wages and to ensure that these wages are appropriately accounted for in the tax system, thereby impacting how service employees report their income.

Key Provisions

The bill includes the following significant provisions:

Definition of Tipped Wages:

The bill introduces a new definition for "tipped wage" in Section 1 of Chapter 62 of the General Laws. It specifies that tipped wages include any sum of money given as a gratuity or acknowledgment of service performed by wait staff, service employees, or service bartenders. This definition encompasses amounts designated by credit card patrons.

Tax Reporting Changes:

The bill amends Paragraph (b) of Part B of Section 3 of Chapter 62. It adds a new subparagraph that allows taxpayers to report an amount equal to the tipped wages earned within the taxable year. This change aims to ensure that tipped wages are explicitly recognized in tax filings.

Affected Parties

The primary stakeholders affected by this bill include:
- Service Employees: Wait staff, bartenders, and other service employees who rely on tips as a significant portion of their income will benefit from clearer tax reporting guidelines.
- Tax Authorities: The Massachusetts Department of Revenue will need to adjust its processes to accommodate the new definitions and reporting requirements.
- Employers in the Service Industry: Restaurants and other establishments employing tipped workers may need to update their payroll systems to comply with the new regulations.

Procedural Aspects

Introduced: The bill was introduced on February 27, 2025, by Representative Marc T. Lombardo.

Hearing Schedule: A hearing was initially scheduled for November 7, 2025, but has since been rescheduled to November 18, 2025, from 10:00 AM to 1:00 PM. The location for the hearing has also changed to B-1, with a virtual option available.

Legislative Progress: The bill was referred to the committee on Revenue on the same day it was introduced, and the Senate has concurred with its progression.

Conclusion

Bill H 3172 seeks to enhance the clarity and fairness of tax reporting for tipped wages in Massachusetts. By establishing a clear definition and allowing for specific reporting of tipped income, the bill aims to support service employees in accurately reporting their earnings while ensuring compliance with state tax laws. The upcoming hearing will provide an opportunity for stakeholders to discuss the implications of these changes.

Bill