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119-s-2780119th CongressWALLET

No Tax on Large Party Tips Act

Sponsored By: Senator Gallego, Ruben [D-AZ]

Introduced

Summary

This bill would treat tips automatically added to a customer's bill and tips suggested by a business as paid voluntarily for the qualified-tips tax deduction under section 224(d)(2)(A) of the Internal Revenue Code. It clarifies that automatic service charges and business‑prompted suggested tips count as voluntary payments when applying that specific deduction. The change focuses on tax treatment and would affect businesses that add or prompt tips, customers who pay them, and taxpayers claiming the qualified-tips deduction.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

Tax rules for automatic and suggested tips

This bill would treat tips automatically added at payment and business-prompted suggested tips as paid voluntarily. If enacted, tipped workers and businesses would face different tax-reporting treatment under section 224(d)(2)(A). The text gives no effective date, dollar amounts, or implementation details.

Sponsors & CoSponsors

Sponsor

Gallego, Ruben [D-AZ]

AZ • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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