Welcome to the Thursday, May 28, 2026, Brew.
By: Lara Bonatesta
Here’s what’s in store for you as you start your day:
- Nineteen states have conformed to the One Big Beautiful Bill Act’s No Tax on Tips deduction
- John Cornyn becomes second U.S. Senator to lose a primary this month, and other Texas runoff results
- You can help us close the voting information gap
Nineteen states have conformed to the One Big Beautiful Bill Act’s No Tax on Tips deduction
Of the 41 states that levy a broad individual income tax on wages, 19 conformed their tax codes to adopt the No Tax on Tips deduction created by the One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025. Twenty-one states have declined to adopt the deduction. Georgia has partially conformed to it.
The No Tax on Tips deduction allows eligible workers to deduct up to $25,000 in qualified tip income from their federal taxable income each year. It covers tax years 2025 through 2028.
Whether a state extends the No Tax on Tips deduction to its own income tax depends largely on how it conforms to the federal tax code.
State conformity methods
States use one of three main approaches to conform their tax codes to federal law:
- States with rolling conformity automatically adopt most federal tax changes as they are passed, meaning a change takes effect at the state level without additional legislative action.
- States with static conformit y tie their tax codes to the federal code as of a fixed date and do not automatically incorporate a provision passed after that date.
- States with selective conformity adopt federal provisions individually and must pass specific legislation to extend any given change.
The conformity method does not always determine the final outcome. Some rolling-conformity states passed legislation to specifically decouple from the federal No Tax on Tips deduction. Some static conformity states passed legislation to adopt it.
How the No Tax on Tips deduction works
Tips must be voluntary and customer-determined. Automatic gratuities and mandatory service charges do not qualify. Cash tips are defined broadly to include payments by credit card, mobile app, gift card, and cash-equivalent tokens such as casino chips.
Workers must be employed in an occupation the Internal Revenue Service (IRS) has determined customarily and regularly received tips on or before Dec. 31, 2024. The IRS finalized regulations in April 2026 establishing a Treasury Tipped Occupation Code system covering more than 70 occupations across eight categories, including food and beverage service, hospitality, personal care, and transportation.
The deduction phases out at a rate of $100 for every $1,000 of modified adjusted gross income above $150,000 for single filers and $300,000 for joint filers. It does not affect payroll taxes. Tip income remains subject to Social Security and Medicare taxes.
Supporters say the deduction reduces the tax burden on service-industry workers. In an April 2026 press release, the Republican majority on the U.S. House Ways and Means Committee, chaired by Rep. Jason Smith (R-Mo.), said the provision "will cut taxes, on average, by $1,300 for tipped workers." The Tax Foundation, a nonpartisan tax policy research organization, noted the proposal drew broad bipartisan public support, citing polling showing 73 percent of Americans backing the concept as relief for lower-wage service workers.
Critics have raised concerns about cost and scope. The Cato Institute wrote that the provision "reduces federal revenue by about $30 billion per year, or roughly 1.1 percent of total income tax receipts," and cautioned against the accumulation of targeted carve-outs in the tax code.
One Fair Wage, a labor advocacy organization, said the policy does not address underlying wage issues in the service industry, arguing that "ending income taxes on tips will not make subminimum wages livable."
In addition to the No Tax on Tips provision, Ballotpedia also has extensive coverage of the state implementation of the OBBBA’s Supplemental Nutrition Assistance Program (SNAP) provisions and the U.S. school choice tax credit scholarship program.
Click here to learn more about state implementation of the No Tax on Tips deduction and here to learn more about the OBBBA.
John Cornyn becomes second U.S. Senator to lose a primary this month, and other Texas runoff results
In Texas’ May 26 primary runoff elections, U.S. Sen. John Cornyn (R) became the second incumbent U.S. senator to lose re-election this month and two incumbent U.S. House members lost their bids for re-election, as voters decided on 38 primary runoffs for congressional and state-level offices. Here’s a look at the results.
U.S. Senate
Attorney General Ken Paxton defeated Cornyn 63.8% to 36.2% in the runoff for Texas’ GOP U.S. Senate nomination. Cornyn, who was first elected in 2002, is the second U.S. Senator to lose a re-election bid in a primary this month – the first was Sen. Bill Cassidy (R) in Louisiana. According to the Texas Tribune, Cornyn is the first U.S. Senator in Texas to lose to a member of the same party since Ralph Yarbrough in 1970.
In the March 3 primary, Cornyn led Paxton 42.5% to 40.8%. On May 19, President Donald Trump (R) endorsed Paxton.
In November, Paxton will face state Rep. James Talarico, who won the March 3 Democratic primary for U.S. Senate. In that primary, Talarico defeated Jasmine Crockett 53.2% to 45.5%.
U.S. House
U.S. Rep. Christian Menefee and former U.S. Rep. Colin Allred defeated incumbents Al Green and Julie Johnson in the Democratic primaries for the 18th and 33rd Congressional Districts, respectively.
The runoff in Texas’ 18th District featured two incumbents (Menefee and Green) due to redistricting, one of two primaries with two incumbents happening nationwide this year. In 2024, there was one primary nationwide featuring two U.S. House incumbents.
Green and Johnson brought the total number of incumbents who have lost primaries this year to four, after Rep. Thomas Massie (R-Ky.) and Dan Crenshaw (R-Texas). An average of between six and seven incumbents were defeated in cycles between 2014 and 2024.
There were 16 U.S. House runoffs in Texas this year — seven Democratic and nine Republican. An average of 12 Texas congressional primaries advanced to runoffs each year from 2016 to 2024.
As of this writing, one U.S. House runoff – the Democratic primary runoff for Texas’ 14th Congressional District – was still too close to call.
Attorney General: Mayes Middleton defeated Chip Roy in the runoff for the Republican nomination to succeed Paxton, who was first elected to the office in 2014.
Meanwhile, Nathan Johnson defeated Joe Jaworski in the runoff for the Democratic nomination.
Lieutenant Governor: Vikki Goodwin defeated Marcos Velez in the Democratic lieutenant gubernatorial runoff. Goodwin will face incumbent Dan Patrick (R), who was first elected in 2014, in the general election. The lieutenant governor is the president of the state Senate and has powers including appointing committee chairs and members, determining the order in which bills are considered, and casting tie-breaking votes.
Railroad commissioner: Bo French (R) defeated incumbent James Wright (R) in the runoff for the GOP nomination for Railroad Commissioner. French will face Jon Rosenthal (D) and Arthur DiBianca (L) in November. The Railroad Commissioner is responsible for regulating Texas’ oil and gas industry.
Other state executives and state-level judicial elections: There were two Democratic runoffs for State Board of Education, and a Republican runoff for a justice on Texas’ Court of Criminal Appeals. The Texas Court of Criminal Appeals is one of Texas’s two courts of last resort. Click here to learn more. There was also one runoff for a seat on an intermediate appellate court.
State legislative runoffs
There were 12 state legislative primary runoffs — one Republican runoff in the state Senate and 11 in the state House (eight Democratic and three Republican).
Incumbent Rep. Hubert Vo (D) was the only incumbent state legislator to lose, bringing the total number of incumbent losses in the Legislature this year to four. All four were in the state House.
Click here to read more about the elections we covered on May 26.
You can help us close the voting information gap
It will happen in primaries across the country through the month of June…voters will head to the polls and have little or no idea what the candidates on their ballot stand for or hope to do if they are elected. This is a major problem – and it’s exactly what we’re trying to fix.
For 19 years, Ballotpedia has worked to provide voters with the information they need to make informed, confident choices. We’ll be covering primaries in 16 states in June – and that means tens of thousands of voters will be counting on us to be there for them with the facts, the data, and the insights they need about candidates, ballot measures, and much more.
You can help us be there for each of those voters – with your monthly tax-deductible gift of $13 or more. The time to act is now…because when voters need information, we have to be ready for them. Please, click here, and let’s make it happen.
