Employment-based salons have been subject to unfair disparities in the tax code for decades. As service sector small businesses commonly owned by women and minorities, the beauty industry is deserving of equitable access to the existing 45 (b) tax tip credit which will create tax parity allowing salons to thrive.
The 45B FICA Tax Tip Credit for Salons is bipartisan, bicameral legislation which directly help women, minorities, and small business owners while shrinking the tax gap and increasing tip reporting compliance.
Hair salons, barbershops and other beauty service establishments are some of the most reliable paths to the middle class for women and minorities, employing more than 2x the national average.
Expanding this credit will help marginalized communities build a better future for themselves and their families.
We need more support than ever to include salons in the 45B FICA tax tip credit. Here is how you can help take action and spread the word!
Download the toolkit and share with your industry friends and clients why the 45B FICA tax tip credit is vital to our industries success.
PBA has championed the FICA Tax Tip Credit legislation for nearly a decade. We need your support to help us fight to keep tax dollars where they belong – in our salons and spas!
In 1993 Congress passed the 45B FICA tax tip credit allowing restaurants to claim a dollar-for-dollar tax tip credit on the employer portion of FICA taxes that businesses pay on tips that employees receive directly from their customers.
As the second-highest tipped industry, salons should receive parity with the restaurant industry in the tax code, but presently they do not. Including the salon and spa industry in this legislation could help our industry greatly.