I have to admit, I had no idea spa owners paid taxes on the tips we give to their employees. Well this may be news to me but not to the industry and new legislation is hoping to put some money back into spas.
For years now spa owners have been required to pay FICA taxes on tips employees receive. The newly proposed Small Business Tax Equalization and Compliance Act would give spa owners a tax credit for the FICA taxes.
The savings for owners - 7.65%. It may not seem like a high percentage but think about a small business getting almost 10% back over a course of a year.
In 1993, Congress gave the restaurant industry a tax credit - recognizing tips as consumer gratiuty not icome payed by an employer. Which is exactly what a tip to a massage therapists is.
What do you think of this new tax break?
For more info on this Act or to support it, click here.
Tags: legislation on spa tax, spa owners, tip tax
