Hair salons, barbershops, spas, and other beauty service establishments owners are mostly comprised of middle class women and minorities, employing more than 2x the national average.
FICA Tax Tip Fairness
Employment-based beauty establishments have been subject to unfair disparities in the tax code for decades.
The Small Business Tax Fairness and Compliance Simplification Act is bipartisan, bicameral legislation which directly helps women, minorities, and small business owners while shrinking the tax gap and increasing tip reporting compliance.
As service sector small businesses commonly owned by women and minorities, the beauty industry is deserving of equitable access to the existing 45B tax tip credit which will create tax parity allowing our industry to thrive.
The Small Business Tax Fairness and Compliance Simplification Act is bipartisan, bicameral legislation which directly helps women, minorities, and small business owners while shrinking the tax gap and increasing tip reporting compliance.
As service sector small businesses commonly owned by women and minorities, the beauty industry is deserving of equitable access to the existing 45B tax tip credit which will create tax parity allowing our industry to thrive.
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Fast Facts about Section 45B FICA Tax Tip Credit.
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Poster
Comprised of small businesses proudly owned by women and minorities, the beauty industry is deserving of equitable access to the existing 45 (b) tax tip credit.
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Read about FICA on Forbes
PBA was spotlighted in a Forbes article, where they provided insights on how the FICA Tax Tip credit can benefit both employers and employees.
What Is The FICA Tax Tip Credit?
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, beauty employers should receive parity with the restaurant employers in the tax code, but presently do not. Extending access to the credit would create a fair and equitable application, keeping capital in our businesses and benefitting the entire industry.
FICA IN THE NEWS
The Hill: Salons and Barbershops are Being Taxed Unfairly
Grand Island Independent – Local View: Time for Tax Fairness in the Service Industry
Irving Weekly – Texas Reps Right Cut Inequities in the Tax Code
Florida Politics – Time to Trim the Tax Burden for Florida Salons, Barbershops
Idaho Statesman – Beauty Salons Like Ours Are Unfairly Taxed by the Feds. The New Congress Must Fix It
Tampa Bay Times – Tipping at Florida’s Hair Salons Should Get the Same Treatment as at Restaurants
Pittsburgh Post-Gazette – Rick Santorum: Our Tax System is Unfair to Salons and Barber Shops
Who this affects
14% African Americans
23% Asians
83% Women
60% women-owned salons
Alliance for
Tax Equity
- International Franchise Association
- National Association of Barber Boards of America
- National Association of Women Business Owners
- National Interstate Council of State Boards
- Personal Care Products Council
- Professional Beauty Association
- Professional Beauty Employment Coalition
- The Esthetics Council
- Associated Skin Care Professionals
- Associated Hair Professionals
- Associated Nail Professionals
- Intercoiffure America Canada
- International Salon Spa Business Network
- International Spa Association
- Cosmetologists Chicago
Bill Sponsors
DARIN LAHOOD (R-IL)
SUZAN DELBENE (D-WA)
BEN CARDIN (D-MD)
TIM SCOTT (R-SC)
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