The US Senate is now debating President Trump’s Big, Beautiful Bill, legislation that would completely rewrite our tax code and deliver on President Trump’s campaign promises. There is a lot in the bill, but beauty salons like mine are most excited about the possibility of the bill ending taxes on tips—both for stylists and for the salons that employ them. The House included it in their version and tens of thousands of small business owners like me urge Senate Republicans to act swiftly to restore this critical language to the bill.
One of President Trump’s most popular campaign promises last year was his proposal to end taxation of tips. Millions of tipped workers across America, like servers and hair stylists, rallied to this message. Millions of other people also supported the idea as promoting tax fairness for working Americans. The Big, Beautiful Bill would make this exciting promise a reality.
In addition, the House version of Big, Beautiful Bill includes a lesser known “no tax on tips” proposal that would have a major impact on small businesses like mine, helping to grow and to create more jobs in our communities. The Big, Beautiful Bill would ensure that the IRS starts treating hair salon tips the way they treat restaurant tips. Unfortunately, this provision was left out of the latest version of the Senate’s draft.
Right now, hair salons and barbershops must pay FICA tax on tips to their employees—even though the salon never actually receives the tip income in the first place. This makes no sense, and it has a major impact on small businesses like mine, which must cover the cost from my cash flow. I love what I do, and I love it when people tip my stylists, but those tips end up costing me a lot of money: a $20 tip, with swipe fees, leads to about a $2 increase in our tax bill at the end of the quarter. This adds up quickly, and the added cost to the salon takes away from my ability to hire and invest.
Thirty years ago, a bipartisan Congress recognized that this was a problem for restaurants since servers depend heavily upon tips for the majority of their income. Congress passed a tax bill that gave a tax credit to restaurants to offset their FICA tax on tips. This ensured that Social Security and Medicare stayed fully funded, while also helping restaurants hire and expand. The tax bill was a complete success, and the restaurant business remains strong 30 years later because of it. There’s no reason the beauty industry should be left behind, especially after the Senate unanimously passed Senator Ted Cruz’s No Tax on Tips bill in which this fix was included.
Most hair salons and barbershops are small, and every dollar counts. This tax fairness issue may sound like a small issue in a trillion-dollar piece of legislation, but it will have a major impact on salons’ ability to serve our communities, helping us keep prices low for our customers and doing our part to fight inflation. It would allow salons like mine to keep more money in our communities and stimulate our local economies rather than sending it off to Washington. Failing to include this language undermines the bill’s promise of helping small businesses and working Americans. It’s not too late to fix that.
I am grateful to have a legislative champion in Senator Ted Cruz representing me in the Senate. I own a beauty business in Texas and appreciate Senator Cruz’s efforts to support me as the main sponsor of the No Tax on Tips bill. I am grateful for his support and advocacy and ask his fellow Senators to follow his lead in helping small businesses like mine to flourish.
The past four years were difficult for many industries, but especially for barbershops and hair salons. During the worst of the pandemic, up to half of all men simply stopped going to their barber. And then, after the pandemic, businesses like mine were hit with the worst inflation in a generation. All the while, I had to pay tax on income I never even received. But now, thanks to the leadership of President Trump, House Speaker Mike Johnson, and Senator Ted Cruz, relief is almost here. The beauty industry just needs the Senate to get the bill across the finish line.
There are a lot of great ideas in the Big, Beautiful Bill, and there is no doubt that the Senate debate will be spirited. But my message to our Senators is this: as you debate the merits of the Big, Beautiful Bill, remember the tens of thousands of small businesses in the beauty industry—and put beauty back in the Big, Beautiful Bill where it belongs.