Bill · S. 2780· Senate(119-S-2780)
No Tax on Large Party Tips Act
- Introduced
- 9/11/2025
- Last activity
- 9/11/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Ruben Gallego
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill is titled the "No Tax on Large Party Tips Act." It aims to clarify how certain types of tips are treated under the Internal Revenue Code of 1986. Specifically, it focuses on the tax deduction for qualified tips. The legislation targets tips that are automatically added to a bill or suggested by a business. By passing this, these specific tip amounts would be treated as being paid voluntarily.
Yes· 3 of 5
Would households on low incomes be better off under this?+5
The bill treats tips as voluntary, potentially increasing the take-home pay for low-income service workers.
Does this cut taxes for middle-income families?+5
The bill reclassifies certain tips as voluntary, which may provide tax relief for service workers and middle-income earners.
Would middle-income households be better off under this?+4
The clarification of tip treatment may result in lower tax burdens for middle-income workers receiving tips.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
- Clarification of tip treatment: The bill clarifies that any tip automatically added to a customer's bill at the time of payment or any tip suggested by a business is treated as paid voluntarily. This change applies to section 224(d)(2)(A) of the Internal Revenue Code of 1986 (Section 2).
Potential Negative Impacts for People
- No negative impacts identified: The provided text does not contain any information regarding potential negative consequences or burdens for individuals or groups of people.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households+5Good For Middle Class Households+4Good For Urban Residents+3
- Economy And Finance
- Reduces Middle Class Taxes+5Improves Small Business Support+3
- 9/11/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate