--- title: SB 2. State Income Tax; exclude tips from taxation collection: bills id: 2025-2026/sb2 cite_as: SB 2, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/sb2 md_url: https://georgiacommons.org/bills/2025-2026/sb2.md text_url: https://georgiacommons.org/bills/2025-2026/sb2/text source_url: https://www.legis.ga.gov/legislation/69275 date: 2026-01-12 status: introduced corpus_version: bills-2026-08-28 license: Public record of the Georgia General Assembly, via LegiScan; see about.md publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice. up: https://georgiacommons.org/bills/2025-2026.md previous: https://georgiacommons.org/bills/2025-2026/sb1.md next: https://georgiacommons.org/bills/2025-2026/sb3.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 240 omitted_url: https://georgiacommons.org/bills/2025-2026/sb2.md?full=1 bill_number: SB 2 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: Senate bill_type: bill status_date: 2025-01-13 last_action: Senate Recommitted sponsors: - Greg Dolezal - Brandon Beach - Randy Robertson - Steve Gooch - Jason Anavitarte - John Kennedy - John Albers - Carden Summers - Mike Hodges - Chuck Payne - Drew Echols - Sam Watson - Max Burns - Timothy Bearden - Brian Strickland - Lee Anderson - Clint Dixon - Shawn Still - Bo Hatchett - Marty Harbin - Colton Moore text_version: Introduced has_text: true legiscan_url: https://legiscan.com/GA/bill/SB2/2025 upstream_id: 1916671 summaries_model: claude-sonnet-5 topic_tags: - state income tax - tipped workers - tax exemptions - employer reporting requirements --- # SB 2. State Income Tax; exclude tips from taxation ## Text 25 LC 50 0974 Senate Bill 2 By: Senators Dolezal of the 27th, Beach of the 21st, Robertson of the 29th, Gooch of the 51st, Anavitarte of the 31st and others A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to the imposition, rate, computation, exemptions, and credits for state income tax,2 so as to exclude tips from taxation; to provide for reporting by employers; to provide for a3 definition; to provide for related matters; to provide for an effective date and applicability;4 to repeal conflicting laws; and for other purposes.5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6 SECTION 1.7 Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the8 imposition, rate, computation, exemptions, and credits for state income tax, is amended in9 subsection (a) of Code Section 48-7-27, relating to the computation of taxable net income,10 by deleting "and" at the end of paragraph (14), by replacing th e period at the end of11 paragraph (15) with "; and", and by adding a new paragraph to read as follows:12 "(16)(A) All tips received by an employee, provided that such i ncome is included in13 the taxpayer's federal adjusted gross income and, but for this paragraph, would be14 subject to taxation by this state.15 S. B. 2 - 1 - 25 LC 50 0974 (B) Each employer shall submit to the department, on forms pre scribed by the16 department, the following:17 (i) For the tax year beginning on January 1, 2025, the total amount of tips received18 by any employee who received tips during the tax year. Such da ta shall be due no19 later than January 31, 2026;20 (ii) For the tax year beginning on January 1, 2026, and each tax year thereafter, the21 total amount of tips received by any employee who received tips during the tax year. 22 Such data shall be provided monthly or quarterly and shall be d ue no later than the23 due date for the corresponding monthly or quarterly withholding tax returns; and24 (iii) Such additional information as may be required by the co mmissioner to25 effectuate this paragraph.26 (C) As used in this paragraph, the term 'tips' means and inclu des cash tips received27 directly from customers; tips from customers who leave a tip th rough electronic28 settlement or payment, such as a credit card, debit card, gift card, or any other29 electronic payment method; the value of any noncash tips, such as tickets or other items30 of value; and tip amounts received from other employees paid out through tip pools, tip31 splitting, or any other formal or informal tip-sharing arrangement. Such term shall not32 include service charges that customers must pay, such as automatic gratuities."33 SECTION 2.34 This Act shall become effective on July 1, 2025, and shall be applicable to all taxable years35 beginning on or after January 1, 2025.36 SECTION 3.37 All laws and parts of laws in conflict with this Act are repealed.38 S. B. 2 - 2 - ## Summaries written by Georgia Commons The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary. Senate Bill 2 would exclude tips from Georgia state income tax for employees who earn them, while requiring employers to report tip totals to the state. ### Plain-language summary Under current Georgia law, tips that employees earn are counted as part of their taxable income for state income tax purposes. Senate Bill 2 would change that by adding a new exemption to Georgia's income tax code (O.C.G.A. § 48-7-27) so that all tips an employee receives, as long as they are included in the employee's federal adjusted gross income, would no longer be subject to Georgia state income tax. The bill also requires employers to report tip totals to the Georgia Department of Revenue. For 2025, employers must report the total tips employees received by January 31, 2026. Starting in 2026, employers must report tip totals monthly or quarterly, on the same schedule as their withholding tax returns. The bill defines tips broadly, covering cash tips, electronic payments like credit card tips, noncash tips, and tip-pooling arrangements, but excludes mandatory service charges such as automatic gratuities. The law would take effect July 1, 2025, and apply to tax years starting on or after January 1, 2025. ### What it does - Creates a new exemption in Georgia's income tax law (O.C.G.A. § 48-7-27) so tips employees receive are no longer taxed by the state. - Requires the tip income to already be counted in the employee's federal adjusted gross income for the state exemption to apply. - Requires employers to report total employee tip amounts to the Georgia Department of Revenue, starting with a report due January 31, 2026 for the 2025 tax year. - Requires ongoing monthly or quarterly tip reporting from employers beginning in 2026, timed to match existing withholding tax return deadlines. - Defines 'tips' to include cash tips, electronic payment tips, noncash tips, and tip-pool or tip-split amounts, but excludes mandatory service charges like automatic gratuities. - Sets the law to take effect July 1, 2025, applying retroactively to tax years beginning on or after January 1, 2025. ### Who it affects Tipped employees in Georgia, such as restaurant servers, bartenders, and other service workers, would benefit from the tax exclusion. Employers who pay tipped workers would face new reporting duties to the Georgia Department of Revenue, and the department itself would administer the new reporting and exemption process. ### Why it matters Tipped workers in Georgia would keep more of their tip income because it would no longer count toward state income tax. Employers would need to track and report tip totals to the state on a new schedule, adding a compliance task tied to their existing tax reporting deadlines. ### Key provisions - Section 1 amends O.C.G.A. § 48-7-27(a) by adding paragraph (16), excluding all employee tips from Georgia taxable income if those tips are part of federal adjusted gross income. - Section 1(B) requires employers to report total tips paid to each employee, with the first report due January 31, 2026 for tax year 2025. - Section 1(B)(ii) requires monthly or quarterly tip reporting starting in 2026, due on the same dates as withholding tax returns. - Section 1(C) defines 'tips' to include cash, electronic payment, noncash, and pooled tips, but excludes mandatory service charges such as automatic gratuities. - Section 2 sets the effective date as July 1, 2025, applying to tax years beginning on or after January 1, 2025. - Section 3 repeals any conflicting laws. ## Status - Status: Introduced (2025-01-13) - Last action: Senate Recommitted (2026-01-12) - Sponsors: Greg Dolezal, Brandon Beach, Randy Robertson, Steve Gooch, Jason Anavitarte, John Kennedy, John Albers, Carden Summers, Mike Hodges, Chuck Payne, Drew Echols, Sam Watson, Max Burns, Timothy Bearden, Brian Strickland, Lee Anderson, Clint Dixon, Shawn Still, Bo Hatchett, Marty Harbin, Colton Moore - Official page: https://www.legis.ga.gov/legislation/69275 > The history, votes, and amendments (240 characters) are at https://georgiacommons.org/bills/2025-2026/sb2.md?full=1