Beauty Store Business

SEP 2013

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Page 83 of 87

Maggie Award Winner advancing our industry advocacy FICA TIP TAX FAIRNESS LEGISLATION MAKING SIGNIFICANT PROGRESS IN CONGRESS T Deborah Carver Publisher/CEO » Mindy Rosiejka Vice President/CFO » EDITORIAL The Professional Beauty Association (PBA) has made significant progress regarding the Small Business Tax Equalization and Compliance Act; commonly known as the FICA Tip Tax Fairness Legislation. This legislation has been at the forefront of PBA's agenda for several years and has made incredible advances in the 113th Congress with a tax reform-focused agenda, specifically in the House of Representatives Ways and Means Committee. Stephanie Yaggy Lavery Editorial Director » Marc Birenbaum Executive Editor » Shelley Moench-Kelly Managing Editor » Manyesha Batist Senior Editor » Karie L. Frost Fashion/Beauty Director » The professional beauty industry is the second highest tipped industry in the U.S., just behind the restaurant industry. Congress has unfairly segmented the restaurant industry since 1993 allowing them a dollar-for-dollar tax credit on employee tip income. Jerry Lovell Associate Publisher/Advertising Director » Nazli Ozen Santana Account Executive » Every salon/spa professional who receives tips is required by federal law to report that money as part of their income. Compliant beauty professionals not only report tip income, they pay the required FICA (social security and Medicare) taxes on it. Salon and spa owners pay on average $11,000 in taxes per year on employee tip income, income that the owner doesn't benefit from. If passed by Congress, the Tip Tax Fairness Legislation would provide salon/spa owners a dollar-for-dollar credit on FICA taxes paid on employee tip income. The passage of the FICA Tip Tax Fairness Legislation would affect salons and spas in a positive way leading to potential reinvestment back into the business. Salon owners could use the credit they receive to reinvest in employee training and education and for business expansion, resulting in a stronger industry for all segments. House Ways and Means Committee Chairman Dave Camp (R-MI) has made it his goal to pass tax reform in the 113th Congress while establishing 11 tax reform working groups led by members of the committee. These groups are responsible for compiling feedback on their topic from interested stakeholders both in writing and face-to-face. The bipartisan leaders of the small business working group, which is where the FICA tip tax fairness legislation would fall under, are Reps. Vern Buchanan (R-FL) and Allyson Schwartz (D-PA). Both Buchanan and Schwartz's staff, along with Ways and Means Committee staff, met with PBA in January and encouraged PBA to submit comments to the committee, which was done in March. A study analyzing the economic impact of this legislation was conducted in the spring of this year by Alex Brill, CEO of Matrix Global Advisors in Washington DC. The findings of this study, which were very favorable, will be provided to Congressional Members as well as the Joint Committee on Taxation (JCT) staff. This document will be useful to the JCT as they develop a score for the legislation: Meeting with the JCT is the next step in the process. Senator Debbie Stabenow (D-MI), Congressman Sam Johnson (R-TX) and Congressman John Lewis (D-GA) will be the bill's sponsors. NEXT STEPS... HOW TO GET INVOLVED To get the attention this issue deserves, it is imperative that industry professionals from all segments get involved and tell decision makers what this credit can do for the industry and for small businesses across the nation. It is every professional's responsibility to help advance the industry, increase legitimacy, and educate colleagues about the importance of compliance and advocating for tax fairness for the industry. ADVERTISING ART Dawn Cobalt Creative Director Michael Block Art Director Cristen Wilson Graphic Artist Armando Sanchez Photographer/Photo Editor Cam Campanaro Pre-Press Manager Sophia Freeman Desktop Specialist WEB/MARKETING Andrew B. Smith Marketing Director Lizzy Sherman Senior Web Editor Ben Bregman Web Art Director Ryan Boydstun Webmaster/Designer PRODUCTION Garnet Blair Production Director Madlen Martinez Production Manager Claudia Marquez Production Coordinator » Flora Robinson Production Assistant CIRCULATION Barbara Shepherd Circulation Director Carlos Benskin Senior Circulation Manager Stephen Verba Circulation Manager/Intranet/Marketing Specialist ADMINISTRATION Lourdes Nuno Accounting Manager Viktoriya Milshteyn Accounts Receivable Manager Susie Chavez Accounting Assistant Natasha Macenikova Accounting Assistant April Menendez Show Manager Denise Maiman Special Projects Manager Dario Dicochea Administrative Assistant For advertising information, call 800.442.5667, 818.782.7328. SUBSCRIPTION QUESTIONS? Write to Beauty Store Business, Attn: Subscriptions, PO Box 1072, Skokie, IL 60076-8072; call 800.624.4196 or 847.763.9615 or email PUBLICATION OFFICES: Beauty Store Business, 7628 Densmore Ave., Van Nuys, CA 91406-2042 For all nonsubscription questions, call 818.782.7328 or fax 818.782.7450. -RLQWKH3%$6WDWH& 6WD\,QIRUPHGZLWK3%$*RYHUQPHQW$GYRFDF\ The Professional Beauty Association (PBA) advocates for the rights of every member and is dedicated to tracking, introducing and responding to legislation at both the state and federal levels VHSG ONSDMSH@K SN @ƤDBS SGD AD@TSX HMCTRSQX KNMF VHSG NTQ &NUDQMLDMS CUNB@BX program, PBA provides our members with Education, Signature Events, Charitable .TSQD@BG1DRD@QBG@MC!TRHMDRR1DRNTQBDR 5HRHSOQNAD@TSX NQFENQLNQDHMENQL@SHNM 82 September 2013 | The views and opinions in the articles herein are not to be taken as official expressions of the publishers, unless so stated. The publishers do not warrant, either expressly or by implication, the factual accuracy of the articles herein, nor do they so warrant any views or opinions offered by the authors of said articles. No part of this publication may be reproduced in any form or by any means, including photocopying, or utilized by any information storage and retrieval system without written permission from Beauty Store Business. ©2013 by Creative Age Communications, Inc. All rights reserved.

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