Bill · H.R. 2603· House(119-HR-2603)
Small Business Tax Fairness and Compliance Simplification Act
- Introduced
- 4/2/2025
- Last activity
- 4/2/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Darin LaHood
- Cosponsors
- - 2 - 4
- Introduced
- In Committee
What this bill would do
This bill, known as the "Small Business Tax Fairness and Compliance Simplification Act," aims to change how the beauty service industry handles taxes. It extends a social security tax credit to beauty service establishments that meet specific tip thresholds. Additionally, it creates a "safe harbor" for employers to prevent IRS tip examinations if they follow certain educational and record-keeping rules. Finally, it introduces new information reporting requirements for people receiving rental payments from beauty service providers.
Yes
Does this make it easier to run a small business?+6
It offers tax credits and a safe harbor from IRS tip examinations for beauty service businesses.
Would business owners be better off under this?+6
The bill provides tax credits and reduces IRS examination risks for beauty service business owners.
Does this cut taxes for small businesses?+5
The bill provides a social security tax credit for beauty service establishments with high tip percentages.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Credits for Beauty Businesses: Under Section 2, beauty service establishments can receive a credit for a portion of employer social security taxes paid on employee tips, provided the tips exceed 15 percent of the business's gross receipts for those services.
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Protection from IRS Tip Examinations: Section 3 establishes a "tip program safe harbor." This means as long as an employer sets up an educational program, has employees report monthly income, follows federal tax laws, and keeps specific records for at least four years, the IRS will not initiate a tip examination of that employer.
Potential Negative Impacts for People
-
New Reporting Burdens for Rent Receivers: According to Section 4, any person who receives rental payments aggregating $600 or more from two or more individuals providing beauty services must now file a return with the Secretary of the Treasury containing the names, addresses, and TINs of those individuals.
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Administrative Requirements for Employers: To qualify for the safe harbor in Section 3, employers must implement specific educational programs for both new and existing employees, including quarterly sessions for current staff, and maintain detailed employee and service records for at least four calendar years.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Improves Small Business Support+6Reduces Small Business Taxes+5
- Demographic And Interest Groups
- Good For Business Owners+6
- 4/30/2025
- 1 Cosponsor added.
- 4/28/2025
- 2 Cosponsors added.
- 4/24/2025
- 1 Cosponsor added.
- 4/14/2025
- 1 Cosponsor added.
- 4/2/2025
- Referred to the House Committee on Ways and Means.
- 1 Cosponsor added.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Wesley BellDemocrat · Missouri
John CarterRepublican · Texas
Henry CuellarDemocrat · Texas
Suzan DelBeneDemocrat · Washington
David KustoffRepublican · Tennessee
Frank MrvanDemocrat · Indiana