October 2018 FICA Tip Tax Roundtable Discussion.
In coordination with Rep. LaHood's local office, a Roundtable Discussion was held on October 10, 2018 at Five Senses Spa, Salon & Barbershop. Local and surrounding area business owners within this industry were present along with Congressman Darin LaHood.
Peoria Journal Star: U.S. Rep. Darin LaHood picks up tips for tip-tax bill, by Steve Tarter
WMBD-TV: Beauty industry seeks lawmakers help to qualify for FICA Tax Tip credit, by Rebecca Brumfield
WYZZ-TV: Rep. LaHood hears from local small business salon owners regarding tip tax legislation
September 2018 FICA Tip Tax Bill Introduction.
On Friday, September 7, 2018 Congressman LaHood introduced the FICA Tip Tax bill! Support is needed to help this bill become law.
The PBA has made it simple for business owners and professionals to take action by sending a message to Congress to support the Small Business Tax Fairness and Compliance Simplification Act with just one click. https://p2a.co/HieFA3O
Late September 2018, Paola spoke at a conference in Atlanta, GA presented by Modern Salon, where she continued to educate the industry, asking for support by sending a message to Congress through PBA's website.
April 2018, Press Conference in Washington DC.
The press conference presented various speakers such as Rep. Darin LaHood, Senator Ted Cruz, Congresswoman Cathy McMorris Rodgers and six other US Representatives.
Paola was invited back out to Washington DC to speak at a tax press conference
It was a privilege for Paola to introduce Rep. Darin LaHood at the press conference, where Congressman LaHood spoke about his visit to Five Senses Spa, Salon & Barbershop where he heard first hand what it was like to receive a surprise $500 bonus, and what the employees did with the money.
During that visit, Paola met with additional representatives about the Tip Tax. Since then, Rep. Darin LaHood's office has worked with the PBA and has moved this issue forward.
March 2018 Congressman Darin LaHood's visit to Five Senses
On Friday, March 23, 2018, Rep. Darin LaHood personally visited the team at Five Senses Spa, Salon & Barbershop during the company's afternoon huddle.
The Congressman stood in the same spot where Paola distributed $10,000, and heard first hand what it was like to receive a surprise $500 bonus, and what the employees did with the money.
As the team started their afternoon appointments, Paola had the opportunity to present the Tip Tax issue in depth to Rep. Darin LaHood. He was able to fully understand the burden that Five Senses encounters by showing him the amount collected in tips for 2017 and how the Tip Tax impacted Paola's business.
February 2018 Americans for Tax Reform (ATR) Gala
American political advocate appointed by President Ronald Regan, Grover Norquist, invited Paola Hinton to speak at the Americans For Tax Reform Gala in Washington DC about the surprise bonus. During that trip, Paola met with different offices about the FICA Tip Tax.
Staff on the United States House Committee on Ways and Means conducted an interview with Paola about the surprise bonus and the FICA Tip Tax.
Rep. Darin LaHood's Chief of Staff and Legislative Director met with Paola to understand and discuss the FICA Tip Tax.
December 2017 Tax Bill Law Celebration.
With the December 2017 Tax Bill that was signed into law, Five Senses Spa, Salon & Barbershop celebrated with a $10,000 surprise team bonus!
Each employee received $500 in cash, and the priceless moment was all caught on video.
The story was picked up by the Chicago Tribune, and Paola found herself and her company on the front page and business section of the Sunday, January 28, 2018 issue.
April 2013 Lobby Days:
April 2013 Lobby Days. Paola Hinton first learned about the Tip Tax issue at a salon and spa business conference in New Orleans, LA. Business owners that were PBA members took the stage and explained the Tip Tax issue to an entire audience.
It left an impression on Paola, and after reading an article by Stacey Soble in Salon Today magazine encouraged Paola to get involved with PBA, she decided to contact Myra Irizarry at the PBA. In 2013, Paola attended her first Lobby Days in Washington DC with the PBA. Paola helped educate a dozen representatives on Capitol Hill about the burden the tip taxes place on salon and spa owners that do NOT receive any of the tip income and yet are required to pay taxes on it.
The issue has been discussed by the PBA for over a decade and still remains unresolved.
2017 Tips Explanation
“In 2017, Five Senses Spa, Salon & Barbershop guests showed their appreciation to our service providers with gratuities totaling $170,000. Tips are considered wages, therefore, I as the employer paid for Social Security, Medicare, State Unemployment Tax and credit card fees that amounted to $19,000 in costs which I received no revenue for.” ~Paola Hinton, Owner of Five Senses Spa, Salon & Barbershop
Paola has had the opportunity to bring attention to an unfair tip taxing on businesses in the beauty industry that primarily impacts business owners negatively, and ultimately effects employees as a result. With the support of the Professional Beauty Association (PBA )for the past decade and Congressman Darin LaHood since spring 2018, the hopes is to have a bill passed to extend a tax credit for businesses across the nation that facilitate tips for their employees within the beauty industry - just as the food service industry was granted in 1993.
Like the restaurant industry, salon and spa professionals receive a significant amount of their income through tips, which by law must be reported as wages and income. Salon and spa owners do NOT receive any of this tip income yet are required to pay taxes on it: Beauty industry employers are responsible for paying the 7.65% FICA (Social Security and Medicare) taxes on all employee income, including customer-paid tips.
Paola explains the reality of the costs associated with collecting and facilitating tips (Social Security Taxes, Medicare Taxes, State Unemployment Taxes, credit card percentages and growing credit card fees) for employees by showing her personal business numbers that visually shows the following,
- A $20 tip to an employee costs Five Senses $2.24+
- During the more generous times where guests tip higher for special occasions and holidays, a $100 tip to an employee costs Five Senses $11.18+
- Over the course of 2017, $170,000 in tips for employees ended up costing Five Senses $19,000+
The costs on tips that business owners do not receive any income from is alarming and unfair. Paola has been educating people in the industry to understand the positive impact this bill would have on businesses and employees alike. The credit would allow for business owners to reinvest into their company and employees, offer additional employee benefits, hire more people their communities, and the list of opportunities goes on.
The Professional Beauty Association has a dedicated section of their website devoted to FICA Tip Tax Credit information. The PBA has made it simple for business owners and professionals to take action by sending a message to Congress to support the Small Business Tax Fairness and Compliance Simplification Act with just one click. https://p2a.co/HieFA3O
Lifecycle of a Tip & Ways and Means Committee Bill Sponsors
Lifecycle of a $20 tip, $100 tip and total 2018 tips facilitated for our team at Five Senses.
Current Ways & Means Committee Bill Sponsors.
Ways & Means Committee current bill sponsorship (as of April 1, 2019).
Paola Hinton's Industry Involvement Timeline
A timeline of Five Senses Spa, Salon and Barbershop Owner, Paola Hinton, industry involvement.
- April 2013 Lobby Days
- December 2017 Tax Bill Law $10,000 Team Bonus Celebration
- February 2018 Americans For Tax Reform (ATR) Gala
- March 2018 Congressman Darin LaHood's visit to Five Senses
- April 2018 Press Conference in Washington DC
- September 2018 FICA Tip Tax Bill Introduction
- October 2018 FICA Tip Tax Roundtable Discussion
- January 2019 FICA Tip Tax Presentation at Serious Business Conference in New Orleans, LA
- April 2019 Aveda Business Owner's Call
- > Lifecycle of a Tip for $20, $100, Total for 2018
- > PBA's automatic email to congress person probeauty.org/ficaaction
- > Ways & Means Committee current bill sponsorship
January 2019 FICA Tip Tax Presentation at Serious Business Conference in New Orleans, LA
January 21, 2019: FICA Tip Tax Presentation - Serious Business Conference in New Orleans, LA. It was an honor to speak at the conference that brought 1,600 spa and salon business owners and professionals together! As we continue to work with lawmakers in Washington DC, our industry needs your help to extend the Federal Insurance Contribution Act (FICA) 45(b) tip tax credit to spa and salon businesses. The presentation gives an overview of Paola's personal numbers and how Tip Tax impacts Five Senses Spa, Salon & Barbershop. View the stage presentation on or .
Please help us take action with the Professional Beauty Association's (PBA) automated email that will be routed to your local representative. probeauty.org/ficaaction
Link to the $10,000 Team Bonus video that is referenced in the presentation. https://lnkd.in/gN5rmv3
