Lifetime Citizen Portal Access — AI Briefings, Alerts & Unlimited Follows
Salon owner Elizabeth Gardner says tax-on-tips change funded better benefits for staff
Loading...
Summary
Elizabeth Gardner of Bristol, Tennessee said a recent policy eliminating taxes on tips reduced her employer tax obligations by about $76,000 and allowed her to upgrade health coverage and add life insurance for roughly 80 employees; she read a worker's statement saying the change helped her secure a home down payment.
Elizabeth Gardner of Bristol, Tennessee said a recent policy change that removed taxes on tips allowed her multi-site salon business to cut employer-side payroll costs and reinvest the savings in employee benefits.
Gardner, who said she and her husband own 12 Great Clips franchise salons in northeast Tennessee, southwest Virginia and eastern Kentucky, told listeners that her organization employs about 80 people and that, "of the 80 people in September, we had collected over $1,000,000 in tips." She said the changed tax treatment reduced the employer matching on those amounts and produced approximately $76,000 in savings for her business, which she directed toward benefits.
"That allowed us to plow that back into benefits packages," Gardner said. She described upgrading the employer-offered health plan to lower deductibles (from a plan with a $7,400 deductible to one with a $2,000 deductible) and providing company-paid life insurance of $15,000 for every employee. "It's real life," she said, emphasizing the tangible effect on workers.
Gardner also credited a staff member she identified only as "Paula" with earlier advocacy that she said led to the salon industry's inclusion in what she referred to repeatedly as "45 b," describing the prior treatment as imposing a 7.65% charge on amounts that did not appear as top-line revenue.
She read a brief written statement from an employee, Caitlin Thomas of Abingdon, Virginia: "This represents a truly transformative change for countless service professionals across the sector, myself included. The ability to retain the full value of my earned tips has directly empowered me to achieve a crucial personal goal, securing the necessary down payment for my first home."
Gardner presented the testimony as an example of how changing the tax treatment of tips, in her account, can directly affect small employers' ability to raise benefit levels for employees. The remarks were testimony-level comments; there were no motions, votes or formal actions recorded in the provided transcript.
The testimony identified a claimed employer savings figure and cited an internal benefits decision; the amounts and the reference to "45 b" were offered by the speaker and were not independently verified in the transcript.
