Fighting for fair tax legislation for small business owners has been a major focus for the Professional Beauty Association (PBA) over the past several years. The Small Business Tax Equalization and Compliance Act (H.R. 1957), commonly known as the FICA Tip Tax Legislation, would provide tax equality and increased compliance for small businesses in the salon industry by extending the 45(b) FICA tax credit to salon owners – a credit that is currently only available to restaurant owners.
Working with industry advocates and members of Congress, we continue to push forward this effort with the sponsorship of Congressman Sam Johnson of Texas. When asked why Congressman Johnson stands behind H.R. 1957, this is what he told us…
“As a member of the tax-writing Ways and Means Committee, I am a leading conservative voice for lower taxes especially for America’s small businesses. That’s why I have introduced the Small Business Tax Equalization and Compliance Act (H.R. 1957), which would address the unfair tax treatment of tips in the salon industry, an industry which employs hundreds of thousands of Americans across the country.
It should come as no surprise to business owners that the tax code can stand in the way of growing their businesses. With respect to the salon industry, the issue at hand is that employers must pay payroll taxes on the tips received by their salon employees. Similar to relief that is currently available to the restaurant industry, my common-sense bill, H.R. 1957, would rightly ease the tax burden on salon owners by providing a tax credit for payroll taxes paid on tips. Doing so will better enable salon owners to invest and grow their businesses thus adding to their payrolls and further contributing to the local economy. The bill also includes sensible measures to improve tax compliance.
As a life-long supporter of lower taxes, especially for small businesses, I hope this bipartisan bill gets serious consideration by the House and Senate. I aim to use my tenure on the tax-writing Ways and Means Committee to help out America and ensure that our tax policies help, not hurt, American businesses and families.”