Us Congress 2025-2026 Regular Session

Us Congress House Bill HB2603 Compare Versions

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

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 2603
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 HOUSE OF REPRESENTATIVES
9	9	APRIL2, 2025
10	10	Mr. L
11	11	AHOOD(for himself and Ms. DELBENE) introduced the following bill;
12	12	which was referred to the Committee on Ways and Means
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	•HR 2603 IH
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) of the Inter-7
36	36	nal Revenue Code of 1986 is amended by striking 8
37	37	paragraph (2) and inserting the following new para-9
38	38	graphs: 10
39	39	‘‘(2) A
40	40	PPLICATION ONLY TO CERTAIN LINES OF 11
41	41	BUSINESS.—In applying paragraph (1) there shall 12
42	42	be taken into account only tips received from cus-13
43	43	tomers or clients in connection with the following 14
44	44	services: 15
45	45	‘‘(A) The providing, delivering, or serving 16
46	46	of food or beverages for consumption, if the tip-17
47	47	ping of employees delivering or serving food or 18
48	48	beverages by customers is customary. 19
49	49	‘‘(B) The providing of beauty services to a 20
50	50	customer or client if the tipping of employees 21
51	51	providing such services is customary. 22
52	52	‘‘(3) L
53	53	IMITATION ON APPLICATION TO BEAUTY 23
54	54	SERVICES.—Paragraph (2)(B) shall not apply for 24
55	55	purposes of determining the credit allowed under 25
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58	58	•HR 2603 IH
59	59	subsection (a) with respect to any taxpayer for any 1
60	60	taxable year unless— 2
61	61	‘‘(A) the aggregate amount of tips taken 3
62	62	into account by such taxpayer as an employer 4
63	63	for such taxable year under paragraph (1)(A) 5
64	64	with respect to services described in paragraph 6
65	65	(2)(B), exceeds 7
66	66	‘‘(B) 15 percent of the taxpayer’s gross re-8
67	67	ceipts with respect to the services described in 9
68	68	paragraph (2)(B) for such taxable year.’’. 10
69	69	(2) B
70	70	EAUTY SERVICE DEFINED .—Section 45B 11
71	71	of such Code is amended by adding at the end the 12
72	72	following new subsection: 13
73	73	‘‘(e) B
74	74	EAUTYSERVICE.—For purposes of this sec-14
75	75	tion, the term ‘beauty service’ means any of the following: 15
76	76	‘‘(1) Barbering and hair care. 16
77	77	‘‘(2) Nail care. 17
78	78	‘‘(3) Esthetics. 18
79	79	‘‘(4) Body and spa treatments.’’. 19
80	80	(b) C
81	81	REDITDETERMINEDWITHRESPECT TOMIN-20
82	82	IMUMWAGE INEFFECT.—Section 45B(b)(1)(B) of the 21
83	83	Internal Revenue Code of 1986, is amended— 22
84	84	(1) by striking ‘‘as in effect on January 1, 23
85	85	2007, and’’; and 24
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88	88	•HR 2603 IH
89	89	(2) by inserting ‘‘, and in the case of food or 1
90	90	beverage establishments, as in effect on January 1, 2
91	91	2007’’ after ‘‘without regard to section 3(m) of such 3
92	92	Act’’. 4
93	93	(c) E
94	94	FFECTIVEDATE.—The amendments made by 5
95	95	this section shall apply to taxable years beginning after 6
96	96	December 31, 2024. 7
97	97	SEC. 3. EMPLOYER TIP REPORTING SAFE HARBOR. 8
98	98	(a) I
99	99	NGENERAL.—Section 3121(q) of the Internal 9
100	100	Revenue Code of 1986 is amended— 10
101	101	(1) by striking so much as precedes ‘‘of this 11
102	102	chapter’’ and inserting the following: 12
103	103	‘‘(q) T
104	104	IPSINCLUDED FOR BOTHEMPLOYEE AND 13
105	105	E
106	106	MPLOYERTAXES.— 14
107	107	‘‘(1) I
108	108	N GENERAL.—For purposes’’; and 15
109	109	(2) by adding at the end the following new 16
110	110	paragraph: 17
111	111	‘‘(2) T
112	112	IP PROGRAM SAFE HARBOR .—In the case 18
113	113	of an employer who employs one or more employees 19
114	114	who receive tips in the course of such employment 20
115	115	which are attributable to the performance of beauty 21
116	116	services (as such term is defined in section 45B) are 22
117	117	considered remuneration for such employment under 23
118	118	this section, no IRS tip examination with respect to 24
119	119	such employer shall be initiated (except in the case 25
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122	122	•HR 2603 IH
123	123	of a tip examination of a current or former em-1
124	124	ployee) if the employer— 2
125	125	‘‘(A) establishes an educational program 3
126	126	regarding applicable laws relating to proper re-4
127	127	porting of tips received by employees for— 5
128	128	‘‘(i) new employees, which shall in-6
129	129	clude both verbal explanation and written 7
130	130	materials, and 8
131	131	‘‘(ii) existing employees, which shall 9
132	132	be conducted quarterly, 10
133	133	‘‘(B) establishes procedures for tipped em-11
134	134	ployees to provide monthly reporting of cash 12
135	135	and charged services and related tip income of 13
136	136	at least $20 under section 6053(a), 14
137	137	‘‘(C) complies with all applicable Federal 15
138	138	tax law requirements applicable to employers 16
139	139	for purposes of filing returns, and collection 17
140	140	and payment of taxes imposed, with respect to 18
141	141	tip income received by employees, and 19
142	142	‘‘(D) maintains employee records related 20
143	143	to— 21
144	144	‘‘(i) contact information for such em-22
145	145	ployees, and 23
146	146	‘‘(ii) gross receipts from any services 24
147	147	subject to tipping, and charge receipts for 25
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150	150	•HR 2603 IH
151	151	such services, for a period of not less than 1
152	152	4 calendar years after the calendar year to 2
153	153	which the records relate.’’. 3
154	154	(b) E
155	155	FFECTIVEDATE.—The amendments made by 4
156	156	this section shall apply to taxable years beginning after 5
157	157	December 31, 2025. 6
158	158	SEC. 4. INFORMATION REPORTING OF INCOME FROM 7
159	159	SPACE RENTALS IN THE BEAUTY SERVICE IN-8
160	160	DUSTRY. 9
161	161	(a) I
162	162	NGENERAL.—Subpart B of part III of sub-10
163	163	chapter A of chapter 61 of the Internal Revenue Code of 11
164	164	1986 is amended by adding at the end the following new 12
165	165	section: 13
166	166	‘‘SEC. 6050Z. RETURNS RELATING TO INCOME FROM CER-14
167	167	TAIN RENTALS OF SPACE IN THE BEAUTY 15
168	168	SERVICE INDUSTRY. 16
169	169	‘‘(a) R
170	170	EQUIREMENT OF REPORTING.—Any person 17
171	171	who, in the course of a trade or business and for any cal-18
172	172	endar year, receives rental payments from two or more 19
173	173	individuals providing beauty services (as defined in section 20
174	174	45B(e)) aggregating $600 or more each for the lease of 21
175	175	space to provide such services to third-party patrons shall 22
176	176	make the return described in subsection (b) with respect 23
177	177	to each person from whom such rent was so received at 24
178	178	such time as the Secretary may by regulations prescribe. 25
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181	181	•HR 2603 IH
182	182	‘‘(b) RETURN.—A return is described in this sub-1
183	183	section if such return— 2
184	184	‘‘(1) is in such form as the Secretary may pre-3
185	185	scribe, and 4
186	186	‘‘(2) contains— 5
187	187	‘‘(A) the name, address, and TIN of each 6
188	188	person from whom a rental payment described 7
189	189	in subsection (a) was received during the cal-8
190	190	endar year, 9
191	191	‘‘(B) the aggregate amount of such pay-10
192	192	ments received by such person during such cal-11
193	193	endar year and the date and amount of each 12
194	194	such payment, and 13
195	195	‘‘(C) such other information as the Sec-14
196	196	retary may require. 15
197	197	‘‘(c) S
198	198	TATEMENTTOBEFURNISHED TOPERSONS 16
199	199	W
200	200	ITHRESPECT TOWHOMINFORMATIONISREQUIRED.— 17
201	201	‘‘(1) I
202	202	N GENERAL.—Every person required to 18
203	203	make a return under subsection (a) shall furnish to 19
204	204	each person whose name is required to be set forth 20
205	205	in such return a written statement showing— 21
206	206	‘‘(A) the name, address, and phone num-22
207	207	ber of the information contact of the person re-23
208	208	quired to make such a return, and 24
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211	211	•HR 2603 IH
212	212	‘‘(B) the aggregate amount of payments to 1
213	213	the person required to be shown on the return. 2
214	214	‘‘(2) F
215	215	URNISHING OF INFORMATION .—The 3
216	216	written statement required under paragraph (1) 4
217	217	shall be furnished to the person on or before Janu-5
218	218	ary 31 of the year following the calendar year for 6
219	219	which the return under subsection (a) is required to 7
220	220	be made. 8
221	221	‘‘(d) R
222	222	EGULATIONS AND GUIDANCE.—The Secretary 9
223	223	may prescribe such regulations and other guidance as may 10
224	224	be appropriate or necessary to carry out the purpose of 11
225	225	this subsection, including rules to prevent duplicative re-12
226	226	porting of transactions.’’. 13
227	227	(b) C
228	228	LERICALAMENDMENT.—The table of sections 14
229	229	for subchapter A of chapter 61 of such Code is amended 15
230	230	by adding at the end the following new item: 16
231	231	‘‘Sec. 6050Z. Returns relating to income from certain rentals of space in the
232	232	beauty service industry.’’.
233	233	(c) EFFECTIVEDATE.—The amendments made by 17
234	234	this section shall apply to payments made after December 18
235	235	31, 2025. 19
236	236	Æ
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