House Bill 1416
By: Representatives Horner of the 3rd, Ridley of the 22nd, Ridley of the 6th, Persinger of the
119th, and Barrett of the 24th
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,
relating to the imposition, rate, computation, exemptions, and credits for state income tax,
so as to exclude tips from taxation; to provide for reporting by employers; to provide for a
definition; to provide for related matters; to provide for an effective date and applicability;
to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the
imposition, rate, computation, exemptions, and credits for state income tax, is amended in
subsection (a) of Code Section 48-7-27, relating to the computation of taxable net income,
by deleting "and" at the end of paragraph (14), by replacing the period at the end of
paragraph (15) with "; and", and by adding a new paragraph to read as follows:
<ins>"(16)(A) All tips received by an employee, provided that such income is included in
the taxpayer's federal adjusted gross income and, but for this paragraph, would be
subject to taxation by this state.
</ins>
<ins>(B) Each employer shall submit to the department, on forms prescribed by the
department, the following:
(i) For the tax year beginning on January 1, 2026, the total amount of tips received
by any employee who received tips during the tax year. Such data shall be due no
later than January 31, 2027;
(ii) For the tax year beginning on January 1, 2027, and each tax year thereafter, the
total amount of tips received by any employee who received tips during the tax year.
Such data shall be provided monthly or quarterly and shall be due no later than the
due date for the corresponding monthly or quarterly withholding tax returns; and
(iii) Such additional information as may be required by the commissioner to
effectuate this paragraph.
(C) As used in this paragraph, the term 'tips' means and includes cash tips received
directly from customers; tips from customers who leave a tip through electronic
settlement or payment, such as a credit card, debit card, gift card, or any other
electronic payment method; the value of any noncash tips, such as tickets or other items
of value; and tip amounts received from other employees paid out through tip pools, tip
splitting, or any other formal or informal tip-sharing arrangement. Such term shall not
include service charges that customers must pay, such as automatic gratuities."
</ins> SECTION 2.
This Act shall become effective on July 1, 2026, and shall be applicable to all taxable years
beginning on or after January 1, 2026.
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.