The Skilled Magnificence Affiliation (PBA) and its members urge Congress to go the Small Enterprise Tax Equity and Compliance Simplification Act—launched on February 25, 2019—which extends the present 45(b) FICA tax tip credit score to salon and spa house owners. Just like the restaurant business—granted this credit score in 1993—salon and spa professionals obtain a major quantity of their earnings by way of ideas, which by regulation should be reported as earnings. Salon and spa house owners don’t obtain tip earnings, but are required to pay 7.65 p.c FICA taxes on all worker earnings, together with customer-paid ideas.
This FICA credit score wouldn’t solely guarantee tax equity, however might assist offset administrative prices related to making certain worker compliance on reporting ideas and permit enterprise house owners to reinvest of their companies and staff. Serena Chreky of Andre Chreky, the Salon Spa shared, “FICA taxes on tipped earnings price small enterprise house owners cash that could possibly be utilized to rent extra staff and improve salons. I’m eager for the reduction this laws will present to house owners like myself as we compete to thrive on this economic system.”
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Salon business job development outpaces the general U.S. economic system in 16 of the final 18 years. In response to the Bureau of Labor Statistics, the variety of private look jobs is projected to extend 13 p.c between 2016 and 2026—almost double the projected 7 p.c development in complete U.S. employment throughout the identical interval. Extending the 45(b) tip tax credit score to salons will assist this vibrant and vital sector. To view the invoice or assist help the trigger by sending a message to Congress immediately.
—By Angelina Lewis
[Image: Courtesy of Unsplash]