Us Congress 2023-2024 Regular Session

Us Congress Senate Bill SB45 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	118THCONGRESS
3	3	1
4	4	STSESSION S. 45
5	5	To amend the Internal Revenue Code of 1986 to simplify reporting require-
6	6	ments, promote tax compliance, and reduce tip reporting compliance
7	7	burdens in the beauty service industry.
8	8	IN THE SENATE OF THE UNITED STATES
9	9	JANUARY24 (legislative day, JANUARY3), 2023
10	10	Mr. C
11	11	ARDIN(for himself and Mr. SCOTTof South Carolina) introduced the
12	12	following bill; which was read twice and referred to the Committee on Finance
13	13	A BILL
14	14	To amend the Internal Revenue Code of 1986 to simplify
15	15	reporting requirements, promote tax compliance, and re-
16	16	duce tip reporting compliance burdens in the beauty serv-
17	17	ice industry.
18	18	Be it enacted by the Senate and House of Representa-1
19	19	tives of the United States of America in Congress assembled, 2
20	20	SECTION 1. SHORT TITLE. 3
21	21	This Act may be cited as the ‘‘Small Business Tax 4
22	22	Fairness and Compliance Simplification Act’’. 5
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25	25	•S 45 IS
26	26	SEC. 2. EXTENSION OF CREDIT FOR PORTION OF EM-1
27	27	PLOYER SOCIAL SECURITY TAXES PAID WITH 2
28	28	RESPECT TO EMPLOYEE TIPS TO BEAUTY 3
29	29	SERVICE ESTABLISHMENTS. 4
30	30	(a) E
31	31	XTENSION OFTIPCREDIT TOBEAUTYSERVICE 5
32	32	B
33	33	USINESS.— 6
34	34	(1) I
35	35	N GENERAL.—Section 45B(b)(2) of the In-7
36	36	ternal Revenue Code of 1986 is amended to read as 8
37	37	follows: 9
38	38	‘‘(2) A
39	39	PPLICATION ONLY TO CERTAIN LINES OF 10
40	40	BUSINESS.—In applying paragraph (1) there shall 11
41	41	be taken into account only tips received from cus-12
42	42	tomers or clients in connection with the following 13
43	43	services: 14
44	44	‘‘(A) The providing, delivering, or serving 15
45	45	of food or beverages for consumption, if the tip-16
46	46	ping of employees delivering or serving food or 17
47	47	beverages by customers is customary. 18
48	48	‘‘(B) The providing of beauty services to a 19
49	49	customer or client if the tipping of employees 20
50	50	providing such services is customary.’’. 21
51	51	(2) B
52	52	EAUTY SERVICE DEFINED .—Section 45B 22
53	53	of such Code is amended by adding at the end the 23
54	54	following new subsection: 24
55	55	‘‘(e) B
56	56	EAUTYSERVICE.—For purposes of this sec-25
57	57	tion, the term ‘beauty service’ means any of the following: 26
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60	60	•S 45 IS
61	61	‘‘(1) Barbering and hair care. 1
62	62	‘‘(2) Nail care. 2
63	63	‘‘(3) Esthetics. 3
64	64	‘‘(4) Body and spa treatments.’’. 4
65	65	(b) C
66	66	REDITDETERMINEDWITHRESPECT TOMIN-5
67	67	IMUMWAGE INEFFECT.—Section 45B(b)(1)(B) of the 6
68	68	Internal Revenue Code of 1986 is amended— 7
69	69	(1) by striking ‘‘as in effect on January 1, 8
70	70	2007, and’’; and 9
71	71	(2) by inserting ‘‘, and in the case of food or 10
72	72	beverage establishments, as in effect on January 1, 11
73	73	2007’’ after ‘‘without regard to section 3(m) of such 12
74	74	Act’’. 13
75	75	(c) E
76	76	FFECTIVEDATE.—The amendments made by 14
77	77	this section shall apply to taxable years beginning after 15
78	78	December 31, 2023. 16
79	79	SEC. 3. EMPLOYER TIP REPORTING SAFE HARBOR. 17
80	80	(a) I
81	81	NGENERAL.—Section 3121(q) of the Internal 18
82	82	Revenue Code of 1986 is amended— 19
83	83	(1) by striking so much as precedes ‘‘of this 20
84	84	chapter’’ and inserting the following: 21
85	85	‘‘(q) T
86	86	IPSINCLUDED FOR BOTHEMPLOYEE AND 22
87	87	E
88	88	MPLOYERTAXES.— 23
89	89	‘‘(1) I
90	90	N GENERAL.—For purposes’’; and 24
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93	93	•S 45 IS
94	94	(2) by adding at the end the following new 1
95	95	paragraph: 2
96	96	‘‘(2) T
97	97	IP PROGRAM SAFE HARBOR .—In the case 3
98	98	of an employer who employs one or more employees 4
99	99	who receive tips in the course of such employment 5
100	100	which are attributable to the performance of beauty 6
101	101	services (as such term is defined in section 45B) are 7
102	102	considered remuneration for such employment under 8
103	103	this section, no IRS tip examination with respect to 9
104	104	such employer shall be initiated (except in the case 10
105	105	of a tip examination of a current or former em-11
106	106	ployee) if the employer— 12
107	107	‘‘(A) establishes an educational program 13
108	108	regarding applicable laws relating to proper re-14
109	109	porting of tips received by employees for— 15
110	110	‘‘(i) new employees, which shall in-16
111	111	clude both verbal explanation and written 17
112	112	materials, and 18
113	113	‘‘(ii) existing employees, which shall 19
114	114	be conducted quarterly, 20
115	115	‘‘(B) establishes procedures for tipped em-21
116	116	ployees to provide monthly reporting of cash 22
117	117	and charged services and related tip income of 23
118	118	at least $20 under section 6053(a), 24
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121	121	•S 45 IS
122	122	‘‘(C) complies with all applicable Federal 1
123	123	tax law requirements applicable to employers 2
124	124	for purposes of filing returns, and collection 3
125	125	and payment of taxes imposed, with respect to 4
126	126	tip income received by employees, and 5
127	127	‘‘(D) maintains employee records related 6
128	128	to— 7
129	129	‘‘(i) contact information for such em-8
130	130	ployees, and 9
131	131	‘‘(ii) gross receipts from any services 10
132	132	subject to tipping, and charge receipts for 11
133	133	such services, for a period of not less than 12
134	134	4 calendar years after the calendar year to 13
135	135	which the records relate.’’. 14
136	136	(b) E
137	137	FFECTIVEDATE.—The amendments made by 15
138	138	this section shall apply to taxable years beginning after 16
139	139	December 31, 2023. 17
140	140	SEC. 4. INFORMATION REPORTING OF INCOME FROM 18
141	141	SPACE RENTALS IN THE BEAUTY SERVICE IN-19
142	142	DUSTRY. 20
143	143	(a) I
144	144	NGENERAL.—Subpart B of part III of sub-21
145	145	chapter A of chapter 61 of the Internal Revenue Code of 22
146	146	1986, as amended by section 334(d) of Public Law 117– 23
147	147	328, is amended by adding at the end the following new 24
148	148	section: 25
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151	151	•S 45 IS
152	152	‘‘SEC. 6050AA. RETURNS RELATING TO INCOME FROM CER-1
153	153	TAIN RENTALS OF SPACE IN THE BEAUTY 2
154	154	SERVICE INDUSTRY. 3
155	155	‘‘(a) R
156	156	EQUIREMENT OF REPORTING.—Any person 4
157	157	who, in the course of a trade or business and for any cal-5
158	158	endar year, receives rental payments from two or more 6
159	159	individuals providing beauty services (as defined in section 7
160	160	45B(e)) aggregating $600 or more each for the lease of 8
161	161	space to provide such services to third-party patrons shall 9
162	162	make the return described in subsection (b) with respect 10
163	163	to each person from whom such rent was so received at 11
164	164	such time as the Secretary may by regulations prescribe. 12
165	165	‘‘(b) R
166	166	ETURN.—A return is described in this sub-13
167	167	section if such return— 14
168	168	‘‘(1) is in such form as the Secretary may pre-15
169	169	scribe, and 16
170	170	‘‘(2) contains— 17
171	171	‘‘(A) the name, address, and TIN of each 18
172	172	person from whom a rental payment described 19
173	173	in subsection (a) was received during the cal-20
174	174	endar year, 21
175	175	‘‘(B) the aggregate amount of such pay-22
176	176	ments received by such person during such cal-23
177	177	endar year and the date and amount of each 24
178	178	such payment, and 25
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181	181	•S 45 IS
182	182	‘‘(C) such other information as the Sec-1
183	183	retary may require. 2
184	184	‘‘(c) S
185	185	TATEMENTTOBEFURNISHED TOPERSONS 3
186	186	W
187	187	ITHRESPECT TOWHOMINFORMATIONISREQUIRED.— 4
188	188	‘‘(1) I
189	189	N GENERAL.—Every person required to 5
190	190	make a return under subsection (a) shall furnish to 6
191	191	each person whose name is required to be set forth 7
192	192	in such return a written statement showing— 8
193	193	‘‘(A) the name, address, and phone num-9
194	194	ber of the information contact of the person re-10
195	195	quired to make such a return, and 11
196	196	‘‘(B) the aggregate amount of payments to 12
197	197	the person required to be shown on the return. 13
198	198	‘‘(2) F
199	199	URNISHING OF INFORMATION .—The 14
200	200	written statement required under paragraph (1) 15
201	201	shall be furnished to the person on or before Janu-16
202	202	ary 31 of the year following the calendar year for 17
203	203	which the return under subsection (a) is required to 18
204	204	be made. 19
205	205	‘‘(d) R
206	206	EGULATIONS AND GUIDANCE.—The Secretary 20
207	207	may prescribe such regulations and other guidance as may 21
208	208	be appropriate or necessary to carry out the purpose of 22
209	209	this subsection, including rules to prevent duplicative re-23
210	210	porting of transactions.’’. 24
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213	213	•S 45 IS
214	214	(b) CLERICALAMENDMENT.—The table of sections 1
215	215	for subchapter A of chapter 61 of such Code is amended 2
216	216	by adding at the end the following new item: 3
217	217	‘‘Sec. 6050AA. Returns relating to income from certain rentals of space in the
218	218	beauty service industry.’’.
219	219	(c) EFFECTIVEDATE.—The amendments made by 4
220	220	this section shall apply to payments made after December 5
221	221	31, 2023. 6
222	222	SEC. 5. GAO STUDY. 7
223	223	Not later than 5 years after the date of enactment 8
224	224	of this Act, the Comptroller General shall conduct a study 9
225	225	and submit to the Committee on Small Business and En-10
226	226	trepreneurship of the Senate and the Committee on Fi-11
227	227	nance of the Senate a report detailing how the extension 12
228	228	of the employer social security credit under section 45B 13
229	229	of the Internal Revenue Code of 1986 (as amended by sec-14
230	230	tion 2 of this Act) has impacted employers and employees 15
231	231	with respect to Federal income tax compliance and bene-16
232	232	fits. 17
233	233	Æ
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