PBA Supports the Small Business Tax Fairness and Compliance Simplification Act

PBA-supports-Small-Business-Tax-Fairness-act-kody-gautier

PBA-supports-Small-Business-Tax-Fairness-act-kody-gautier

 

The Professional Beauty Association (PBA) and its members urge Congress to pass the Small Business Tax Fairness and Compliance Simplification Act—introduced on February 25, 2019—which extends the current 45(b) FICA tax tip credit to salon and spa owners. Like the restaurant industry—granted this credit in 1993—salon and spa professionals receive a significant amount of their income through tips, which by law must be reported as income. Salon and spa owners do not receive tip income, yet are required to pay 7.65 percent FICA taxes on all employee income, including customer-paid tips.

 

This FICA credit would not only ensure tax fairness, but could help offset administrative costs associated with ensuring employee compliance on reporting tips and allow business owners to reinvest in their businesses and employees. Serena Chreky of Andre Chreky, the Salon Spa shared, “FICA taxes on tipped income cost small business owners money that could be utilized to hire additional employees and upgrade salons. I am hopeful for the relief this legislation will provide to owners like myself as we compete to thrive in this economy.”

 

RELATEDPBA Members Urge Texas State to Oppose House Bill 1705

 

Salon industry job growth outpaces the overall U.S. economy in 16 of the last 18 years. According to the Bureau of Labor Statistics, the number of personal appearance jobs is projected to increase 13 percent between 2016 and 2026—nearly double the projected 7 percent growth in total U.S. employment during the same period. Extending the 45(b) tip tax credit to salons will help this vibrant and important sector. To view the bill or help support the cause by sending a message to Congress directly.

—By Angelina Lewis

[Image: Courtesy of Unsplash]

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