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
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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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.
Your donation helps fund the costs associated with supporting the Small Business Tax Fairness and Compliance Simplification Act, H.R. 45 | S. 45 in Congress.
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.
Who this affects
14% African Americans
60% women-owned salons
- 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
“My team is my most important asset. Receiving this credit would allow me to shift from paying taxes on revenue my business does not receive to further investing in the women who work in my salon.”Paige Garland Rachel’s Salon & Day Spa
“The current system penalizes salon owners who declare and pay taxes on their employee’s tips. Extending the 45B credit to the salon industry will increase tax compliance in the second most tipped industry after restaurants and bars.”Edwin Neill Neill Corp
“As a South Carolina salon owner, it’s hard to reconcile why our highly-tipped industry doesn’t have access to same tip credit as our restaurant neighbours. This credit would keep needed funds in my business and in turn be a huge benefit to my hard-working employees.”Archie Todd Currie 5-location Sport Clips owner
“As a long-time business owner, there has been an inequity in the federal tax code, giving restaurant owners access to a tax credit while salons have been left out. The 45B FICA tax tip credit allows restaurant owners a dollar-for-dollar tax credit on taxes paid into Social Security and Medicaid from their business on customer-paid tips.”Lisa Lane Salon Owner of Lisa’s of Annapolis
DARIN LAHOOD (R-IL)
SUZAN DELBENE (D-WA)
BEN CARDIN (D-MD)
TIM SCOTT (R-SC)
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