State Conformity for Salons

Why it matters for salon owners:
Although the One Big Beautiful Bill delivered sweeping federal tax changes, such as bonus depreciation and tip deduction updates, they aren’t automatically adopted at the state level. States with static conformity, like Minnesota, maintain tax laws in place at a specific past date, meaning federal benefits might not apply locally.

• Federal vs. state timing: State laws often lag behind federal updates, creating a “delta” between what’s allowed federally and what state returns can claim.
• Specific areas to watch:
  • Bonus depreciation – available on your federal return but may not qualify at the state level
  • Tip deductions – similarly subject to state timing discrepancies
• Strategic responses:
  • Stay informed about state conformity schedules
  • Consider extending tax filings if valuable federal benefits aren’t yet recognized by your state
  • Coordinate closely with your CPA to tailor tax strategies that align with evolving state regulations

Bottom line for salon businesses:
Don’t assume state conformity to new federal tax provisions,, especially when it comes to deductions your salon might rely on like bonus depreciation or tip-related claims. Proactive tax planning, patience with state timing, and timely CPA collaboration are key to optimizing your returns.

Listen to our podcast, Traction with the Tiger, for a breakdown of State Conformity.