Rockford Sun

Congressman Darin LaHood and Congresswoman Suzan DelBene have put forward the Small Business Tax Fairness and Compliance Simplification Act again. This legislation plans to extend the Federal Insurance Contribution Act (FICA) tax tip credit to salon and beauty service establishments.

Rep. LaHood emphasized the importance of small businesses to the U.S. economy, stating, "Small businesses are the backbone of the United States economy." He adds that the reintroduction of the act alongside Rep. DelBene aims to "level the playing field for beauty salons who rely on tips for a large portion of their income." This legislative effort seeks to simplify the tax system for small business owners and employees, promoting job creation in Illinois.

Rep. DelBene pointed out the unique challenges faced by the beauty industry, noting that it consists mainly of small businesses owned predominantly by women and women of color. "Extending this tax relief to the beauty industry would provide parity with other industries, like food service," she said, aiming to support women-owned businesses and expand the middle class.

The Professional Beauty Association (PBA) showed support for the legislation. Leslie Perry, PBA’s Executive Director, stated, "The Professional Beauty Association proudly supports The Small Business Tax Fairness and Compliance Simplification Act." She commended the legislators for advocating equitable tax policies and expressed eagerness for collaboration to make the legislation a reality.

Currently, the FICA tax tip credit applies to the food service industry but not to the beauty industry, where employees similarly depend on tips. The credit assists employers by reimbursing costs incurred in tip income reporting. Extending the credit aims to reduce tax burdens and improve accurate tip reporting in the beauty industry, providing them equal treatment akin to the food and beverage sector.