There was a post recently on the BeautyTech.com Forums about whether it’s OK for a booth renter to use the salon owner’s credit card machine for her own transactions. As you know a booth renter is running an independent business as far as Uncle Sam is concerned. The poster was worried it would constitute a co-mingling of funds that might be against IRS regulations.
Since I wasn’t sure about this myself, I turned to Ken Cassidy of Kassidy’s Salon Management Consulting. I don’t know anyone who knows more about booth rental issues and how the IRS views beauty industry practices.
This is what he had to say:
“Yes, this can be handled very professionally, but it needs to be one of many items incorporated into any business owner/landlord space sublease agreement. (It would be a sublease agreement if the salon owner does not own the building where her salon or spa is located. If they own the building it would be a space lease agreement.) If a renter wants to use the salon’s credit card machine at the front desk for the processing of her clients’ services and the salon or spa wants to offer that service to its renters, then I would charge each renter, say, 5 % of the total bill including any gratuity added on top for providing that service.”
(Photo courtesy of iStock)