[ad_1]
The Small Business Tax Fairness and Compliance Simplification Act has been proposed in Congress by a bipartisan group of lawmakers.
Hair salon owner says she gives free haircuts for students to give back to families
Amanda Parker, owner of Splendor Studio Salon in Van Buren, says she cuts students’ hair for free to give back to the community.
Paige Eichkorn, Fort Smith Times Record
- Paige Garland is owner of Rachel’s Salon & Day Spa in Memphis, Tennessee.
Anyone familiar with pre-pandemic Memphis can feel the difference walking through downtown on a weekday morning in 2023.
Most weekends the hustle and bustle has returned as our tourism has slowly returned to “normal,” but the landscape has shifted. Many of the businesses that were once the reason for locals making the trip downtown have relocated or closed, memories from what now feels like a different life.
As the owner of a downtown salon, I am constantly aware of it as I learn the new dance of rebuilding my business in an entirely different atmosphere.
In 2019 my employee count was 13, all of them with full books; client lists built from many years of foot traffic turned loyal customers. Today we have six employees, with just two of them being pre-COVID hires.
Our industry too, has changed. There’s a shortage of skilled professionals. And while there are still many salons like mine offering traditional employment, the last few years accelerated the shift we had already begun to see — more professionals opting for booth rental and independent contracting. This works for some, but there remains a need for what my business offers.
The employee salon model is a necessary option for the stylists who don’t have an interest in the business side of this work including things like taxes and marketing, and who do have an interest in paid time off, mentorship, and built-in opportunities for continued education.
We need change in this post-pandemic world
Margins in salons are slim at the best of times. And in 2023 times, we are working to rebuild our client base but without new businesses filling the gaps it has been a challenge.
The cost of our day-to-day supplies has increased substantially. The pandemic created new patterns in our clients, going longer between services and embracing their grey. In an industry that was once referred to as “recession proof,” the current economic climate has created yet another obstacle; people still need haircuts, they don’t necessarily need the experience an eco-friendly, mission-driven, wellness focused small salon like ours provides.
My vision for a different “new normal” will take more work and patience and some changes in the economic atmosphere.
But it will also require Congress to pay special attention to the constraints that are placed upon small business owners and provide solutions to assist us in remaining viable.
The tax law landscape is not balanced
Employers in the beauty industry face a specific issue with a simple fix that has plagued us for decades. As the employer of customarily tipped employees, I have a responsibility to pay FICA taxes on customer-paid tips because they are income. This is important because it makes sure my employees have accurately funded SSI and Medicare and access to a clear financial picture to apply for mortgages and other loans.
This creates a financial burden because tips don’t provide revenue to the business — the salon is merely a third-party pass through for the income. Congress recognized this obstacle 30 years ago and created the 45B tax credit on tips. Unfortunately, it was written specifically for restaurant employers, the most-tipped industry, which means that as an owner in the second-most tipped industry, I don’t have access to it.
Fortunately, legislation has been introduced in both the House and Senate that would extend the tax credit to salons, spas, and barbershops: the Small Business Tax Fairness and Compliance Simplification Act (H.R.45).
I’m grateful for the support of Congressman David Kustoff, R-West Tennessee,, Congressman Tim Burchett, R-East Tennessee, Congresswoman Diane Harshbarger, R-East Tennessee, and my own representative, Congressman Steve Cohen, D-Memphis, who have all signed on to the legislation. This fix is something that could make a difference in the long-term viability of my salon.
My passion for the work I do lies in the opportunity I provide for the diverse individuals I lead and our unique contribution to Tennessee. Businesses like mine are at the heart of the American dream — somewhere to make a living doing what you love in a place with character. I hope our imprint continues to be part of the Memphis culture for years to come.
Paige Garland is owner of Rachel’s Salon & Day Spa in Memphis, Tennessee.
[ad_2]
Source link