Bill · S. 1998· Senate(119-S-1998)
Small Business Tax Fairness and Compliance Simplification Act
- Introduced
- 6/9/2025
- Last activity
- 6/9/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Tim Scott
- Cosponsors
- - 1 - 1
- Introduced
- In Committee
What this bill would do
The Small Business Tax Fairness and Compliance Simplification Act aims to amend the Internal Revenue Code of 1986. It seeks to simplify reporting requirements and reduce the compliance burdens related to tip reporting within the beauty service industry. The bill extends a credit for a portion of employer social security taxes paid on employee tips to certain beauty service establishments. Additionally, it establishes a "tip program safe harbor" for employers who implement specific educational and record-keeping procedures. Finally, the bill introduces new information reporting requirements for income received from certain space rentals in the beauty service industry.
Yes
Would business owners be better off under this?+7
Provides specific tax credits and audit protections for beauty service business owners.
Does this make it easier to run a small business?+6
Provides tax credits and a safe harbor from IRS tip examinations for beauty service employers.
Does this cut taxes for small businesses?+5
The bill extends a tax credit for employer social security taxes on tips to beauty service establishments.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Credits for Beauty Service Establishments: The bill extends a credit for a portion of employer socials security taxes paid on tips to beauty service businesses, provided that tips exceed 15 percent of the taxpayer's gross receipts for those services. (Section 2)
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Protection from IRS Tip Examinations: Employers in the beauty service industry can qualify for a "tip program safe harbor," which prevents an IRS tip examination from being initiated if the employer follows specific requirements. (Section 3)
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Employee Education and Reporting: The safe harbor requires employers to establish educational programs for both new and existing employees regarding proper tip reporting. (Section 3)
Potential Negative Impacts for People
-
New Reporting Requirements for Renters: Any person who receives rental payments from two or more individuals providing beauty services that aggregate to $600 or more for the lease of space must now file a return with the Secretary of the Treasury. (Section 4)
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Compliance Burdens for Employers under Safe Harbor: To qualify for the tip program safe harbor, employers must establish specific educational programs (including verbal and written materials for new employees and quarterly sessions for existing ones) and maintain specific employee records for at least 4 calendar years. (Section 3)
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+7
- 6/11/2025
- 1 Cosponsor added.
- 6/9/2025
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
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.
Angela AlsobrooksDemocrat · Maryland
Bill CassidyRepublican · Louisiana