U.S. Sens. Tim Scott (R-SC) and Ben Cardin (D-MD) recently introduced the Small Business Tax Fairness and Compliance Simplification Act (S. 45), which seeks to establish small business tax code parity.
The legislation specifically seeks to empower hundreds of beauty services providers by expanding the Federal Insurance Contribution Act (FICA) tax tip credit to enable the businesses to be treated similarly to the equally tip-dependent food and beverage industry.
“Entrepreneurs in the rapidly growing beauty services industry are responsible for employing more than 1.3 million hard-working Americans,” Scott said. “This critical tax code modernization effort will benefit small businesses, such as salons and barbershops, simply by creating a level playing field. I am proud to introduce this bipartisan legislation to make it easier for these small business owners and their employees to create wealth and make their American Dream a reality.”
The lawmakers maintain that 80 percent of the 1.2 million establishments providing beauty services have 10 or fewer employees, most of which are owned and operated by women and minorities.
“Workers in the beauty services industry are as reliant on tips as food and beverage workers, and it is time for the tax code to catch up,” Cardin said. “I am proud to introduce this bill with Sen. Scott to modernize the tax code so local barbershops, nail salons, and other beauty service establishments can grow their businesses and create jobs in Maryland and across the country. These salons provide a reliable path to the middle class for women and minorities across the country, and they deserve parity in our tax code.”