Press Releases

DelBene, LaHood Introduce Legislation to Provide Tax Relief for Beauty Professionals and Salon Owners

Today, Representatives Suzan DelBene (WA-01) and Darin LaHood (IL-16) introduced the Small Business Tax Fairness and Compliance Simplification Act (H.R. 45), bipartisan legislation that would bring tax relief to beauty salon owners and workers by extending the Federal Insurance Contribution Act (FICA) tax tip credit to the beauty service industry. The tip credit helps ensure accurate reporting of tip income and reduces the tax gap. 

Currently, over 80 percent of the 1.2 million beauty industry businesses, most of which are owned and operated by women and people of color, employ less than ten employees. This legislation would grant these businesses equal treatment with other industries by providing a tax credit for costs incurred in accounting for tip income.

Extending the FICA tax tip credit to the beauty service industry will also improve reporting of tip income, as it did in the food and beverage industry.

“The beauty industry is largely comprised of small businesses, predominantly owned by women and women of color, with workers who rely heavily on tips. Unfortunately, our tax code does not treat the salon industry the same as other tipped industries that enjoy a fairer and simpler tax administration,” said DelBene. “Extending this tax relief to the beauty industry would provide parity with other industries, like food service, that already take advantage of this credit. This bipartisan legislation would bring commonsense tax relief to salons and their workers, support women-owned businesses, and expand our middle class.”

“Our bipartisan Small Business Tax Fairness and Compliance Simplification Act will level the playing field and provide direct relief to millions of salon and beauty care professionals who rely on tips," said LaHood. "I am proud to continue to champion this bill with Congresswoman DelBene, to strengthen small businesses, improve reporting of tip income, and help businesses navigate IRS administrative rules and procedure."

Last October, DelBene met with salon owners in Washington to discuss how this legislation would provide tax relief to beauty industry professionals and businesses.

The text of the Small Business Tax Fairness and Compliance Simplification Act is available here.