House Bill No. by Representative Bayham proposes to enact a new income tax deduction for resident individual taxpayers in Louisiana, specifically for amounts of tip income received during a taxable year. The bill introduces new legal language under R.S. 47:293(9)(a)(xxvii) to define "tax table income" and establishes R.S. 47:297.26, which outlines the specifics of the deduction. The definition of "tip income" includes amounts reported as "social security tips" and "allocated tips" on IRS Form W-2, as well as cash and charge tips received, minus those reported to employers on IRS Form 4137.

The proposed law limits the deduction to a maximum of $25,000 per taxable year and will apply to taxable periods beginning on or after January 1, 2026. The effective date for the implementation of this deduction is also set for January 1, 2026. This legislation aims to provide financial relief to individuals who rely on tip income, thereby encouraging transparency and proper reporting of such earnings.