I 
118TH CONGRESS 
1ST SESSION 
H. R. 45 
To amend the Internal Revenue Code of 1986 to simplify reporting require-
ments, promote tax compliance, and reduce tip reporting compliance 
burdens in the beauty service industry. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 9, 2023 
Mr. LAHOOD (for himself and Ms. DELBENE) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to simplify 
reporting requirements, promote tax compliance, and re-
duce tip reporting compliance burdens in the beauty serv-
ice industry. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Tax 
Fairness and Compliance Simplification Act’’. 
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SEC. 2. EXTENSION OF CREDIT FOR PORTION OF EM-
PLOYER SOCIAL SECURITY TAXES PAID WITH 
RESPECT TO EMPLOYEE TIPS TO BEAUTY 
SERVICE ESTABLISHMENTS. 
(a) EXTENSION OF TIP CREDIT TO BEAUTY SERVICE 
BUSINESS.— 
(1) IN GENERAL.—Section 45B(b)(2) of such 
Code is amended to read as follows: 
‘‘(2) APPLICATION ONLY TO CERTAIN LINES OF 
BUSINESS.—In applying paragraph (1) there shall 
be taken into account only tips received from cus-
tomers or clients in connection with the following 
services: 
‘‘(A) The providing, delivering, or serving 
of food or beverages for consumption, if the tip-
ping of employees delivering or serving food or 
beverages by customers is customary. 
‘‘(B) The providing of beauty services to a 
customer or client if the tipping of employees 
providing such services is customary.’’. 
(2) BEAUTY SERVICE DEFINED.—Section 45B 
of such Code is amended by adding at the end the 
following new subsection: 
‘‘(e) BEAUTY SERVICE.—For purposes of this sec-
tion, the term ‘beauty service’ means any of the following: 
‘‘(1) Barbering and hair care. 
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‘‘(2) Nail care. 
‘‘(3) Esthetics. 
‘‘(4) Body and spa treatments.’’. 
(b) CREDIT DETERMINED WITH RESPECT TO MIN-
IMUM WAGE IN EFFECT.—Section 45B(b)(1)(B) of the 
Internal Revenue Code of 1986, is amended— 
(1) by striking ‘‘as in effect on January 1, 
2007, and’’; and 
(2) by inserting ‘‘, and in the case of food or 
beverage establishments, as in effect on January 1, 
2007’’ after ‘‘without regard to section 3(m) of such 
Act’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2022. 
SEC. 3. EMPLOYER TIP REPORTING SAFE HARBOR. 
(a) IN GENERAL.—Section 3121(q) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking so much as precedes ‘‘of this 
chapter’’ and inserting the following: 
‘‘(q) TIPS INCLUDED FOR BOTH EMPLOYEE AND 
EMPLOYER TAXES.— 
‘‘(1) IN GENERAL.—For purposes’’; and 
(2) by adding at the end the following new 
paragraph: 
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