MD SB823

Creates a state income tax subtraction for qualified tips received by workers in occupations customarily compensated through wages and tips, including barbering, cosmetology, hospitality, food and beverage service, parking services, and custodial services

Increases Maryland's minimum wage from $15.00/hour to $17.00/hour (January 2027), $18.50/hour (January 2028), and $20.00/hour (July 2028)

Phases out the tip credit system by July 1, 2028, after which employers may no longer count tips toward minimum wage obligations and must pay tipped employees the full state minimum wage

Requires food service facilities to prominently disclose service fee amounts, purposes, and whether fees are paid directly to employees before customers place orders; violations constitute unfair trade practices

Provides employers a tax credit equal to 50% of the difference between minimum wage and tip credit amounts during the transition period (2027-2028), capped at $10,000 per year with no carryover