# 119-s-1998: Small Business Tax Fairness and Compliance Simplification Act

119-s-1998, Small Business Tax Fairness and Compliance Simplification Act, is a 119th Congress bill sponsored by Sen. Scott, Tim [R-SC] (R-SC); status introduced; PRIA reads it as touching household money (as of 2025-12-21).

- Canonical: https://policyrisk.com/legislation/119-s-1998
- As of: 2025-12-21
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 119-s-1998
- Congress: 119
- Title: Small Business Tax Fairness and Compliance Simplification Act
- Status: introduced
- Introduced: 2025-06-09
- Sponsor: Sen. Scott, Tim [R-SC] (R-SC)
- Cosponsors: 2
- Policy area: Taxation
- Touches household money: yes
- Last recorded action: 2025-12-21

## Summary

**Would extend the employer tip credit to beauty service businesses.** It would also create a safe harbor for employer tip reporting in beauty services and require information reporting for rentals of space used by beauty professionals. - Beauty service businesses — Salons, barbers, nail and spa providers would become eligible for the employer tip credit only if employer-counted tips for beauty services exceed 15% of gross receipts in a year. This change would apply to tax years beginning after December 31, 2024. - Employers — Businesses that follow the safe harbor steps would be protected from IRS tip examinations. Requirements include quarterly employee education, monthly employee tip reporting for amounts of at least $20, and keeping records for 4 years. - Space rental hosts — Any business that receives rental payments from two or more beauty-service providers totaling $600 or more in a year would have to file information returns showing each payee’s name, TIN, aggregate payments, and dates, and must furnish payees a statement by January 31.

## Cosponsors (2)

- Sen. Alsobrooks, Angela D. [D-MD] (D-MD), 2025-06-09T00:00:00.000Z
- Sen. Cassidy, Bill [R-LA] (R-LA), 2025-06-11T00:00:00.000Z

## Provisions PRIA read

- Tip tax break for beauty employers: benefit, high. This bill would let employers claim the Social Security tax credit for tips from certain beauty services as well as food and drink. For beauty services, you could claim the credit only if tips counted are more than 15% of your beauty-service gross receipts in the tax year. The change would apply to…
- IRS safe harbor for beauty tips: benefit, medium. If enacted, this would protect qualifying beauty‑service employers from most IRS tip audits. To use the safe harbor, employers would need to give new hires verbal and written tip‑reporting training, train existing staff quarterly, set up monthly tip reporting for amounts $20 or more, follow federal…
- New rental reporting for salons: cost, low. This bill would require businesses who get rental payments from two or more beauty workers to file an IRS return and give each worker a statement if each worker paid $600 or more in a year. The return must show each payee's name, address, tax ID, the total paid, and dates and amounts of each paymen…

## Related bills

- 119-s-4744: Take Care of America’s Veterans Act
- 119-s-4949: Water Resources Development Act of 2026
- 119-s-199: A bill to amend the Internal Revenue Code of 1986 to provide special rules for the taxation of certain residents of Taiwan with income from sources within the…
- 119-s-1404: Combating Organized Retail Crime Act
- 119-s-2464: Community Investment and Prosperity Act
- 119-s-1032: Major Richard Star Act

## Sources
- [119-s-1998 on Congress.gov](https://www.congress.gov/bill/119th-congress/senate-bill/1998)

## Related
- [119-s-4744: Take Care of America’s Veterans Act](https://policyrisk.com/legislation/119-s-4744)
- [119-s-4949: Water Resources Development Act of 2026](https://policyrisk.com/legislation/119-s-4949)
- [119-s-199: A bill to amend the Internal Revenue Code of 1986 to provide special rules for…](https://policyrisk.com/legislation/119-s-199)
- [119-s-1404: Combating Organized Retail Crime Act](https://policyrisk.com/legislation/119-s-1404)
- [119-s-2464: Community Investment and Prosperity Act](https://policyrisk.com/legislation/119-s-2464)
- [119-s-1032: Major Richard Star Act](https://policyrisk.com/legislation/119-s-1032)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/119-s-1998 (as of 2025-12-21).