Bill
HD 425
Overview: HD 425, An Act relative to taxes for tipped wages, proposed bill, introduced November 29, 2025.Purpose and Intent: The primary goal of this legislation is to modify the s
Overview: HD 425, An Act relative to taxes for tipped wages, proposed bill, introduced November 29, 2025.
Purpose and Intent: The primary goal of this legislation is to modify the state's tax code to provide a tax credit for employers who pay their tipped workers a higher base wage. The bill aims to incentivize employers to increase the minimum wage for tipped professions, such as servers and bartenders, and reduce the reliance on tips as the primary source of income.
Key Provisions:
- Establishes a tax credit for employers equal to 50% of the difference between the state's minimum wage and the tipped minimum wage
- Requires employers to pay tipped workers at least 70% of the standard minimum wage before tips
- Directs the Department of Revenue to develop guidance and forms for employers to claim the tax credit
- Includes a sunset provision to automatically repeal the tax credit after 5 years unless extended by the legislature
Affected Parties and Impacts:
- Tipped workers, such as servers, bartenders, and other service industry employees, who will see an increase in their base wages
- Employers in the service industry, who will receive a tax credit to offset the higher labor costs
- State government, which will experience a moderate reduction in tax revenue during the 5-year period
Procedural and Timeline Considerations:
The bill has been introduced in the state House of Representatives and has been referred to the Committee on Ways and Means. If passed, the tax credit would take effect at the start of the next tax year.
Compiled from official sources — confirm details with the bill’s official record.
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