Are tatoo artists considered SSTB. What's the opinion?

[garman22 · Accepted solution]

https://accountants-community.intuit.com/questions/1793641-qbi-and-sstb-would-the-following-qualify-...

Good question. I lean to yes on a one person shop. Possibly a no if its a multi-person shop. But thats only my opinion. I had one artist a couple years ago but not now.

[taxesbymetjr]

Makes sense,  Many tatoo artists utilize the same shop , sort of like beauticians, but handle everything themselves.   

[TaxGuyBill]

No, I don't see how it would qualify as a SSTB.

To me, it does not fit into any of the categories.  If you are thinking of the 'reputation or skill' one, the IRS has said in the Regulations that is extremely limited, and would not apply to tattoo artists.

https://www.irs.gov/pub/irs-drop/td-reg-107892-18.pdf#page=73

the term any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners means any trade or business that consists of any of the following (or any combination thereof):

(A) A trade or business in which a person receives fees, compensation, or other income for endorsing products or services,

(B) A trade or business in which a person licenses or receives fees, compensation, or other income for the use of an individual’s image, likeness, name, signature, voice, trademark, or any other symbols associated with the individual’s identity,

(C) Receiving fees, compensation, or other income for appearing at an event or on radio, television, or another media format

https://www.irs.gov/pub/irs-drop/td-reg-107892-18.pdf#page=227

[garman22]

That was my thought, Bill. I looked at the reputation/skill. I had a tattoo done on my leg that was based on the artists reputation and skill of the specific style I wanted. Im not overly convinced that its not but......Im not married to my opinion either.

[TaxGuyBill]

I agree that a tattoo artist is definitely due to reputation and skill in normal definitions, but it is definitely NOT due to reputation and skill according the the Regulation definition.

[garman22]

Hmmmm...yes, I see the point made via the regs.  Re: performing arts, I assume they dont mean to include visual arts?

[TaxGuyBill]

No, it definitely has the "performing" in there:

"means the performance of services by individuals who participate in the creation of performing arts, such as actors, singers, musicians, entertainers, directors, and similar professionals performing services in their capacity as such."

[garman22]

Yes, I saw that too. I was trying to see if visual arts were a part of performing arts. I agree it does NOT state visual arts.

[IRonMaN]

I think we had this discussion awhile back in regards to tattoos, taxidermy and I forget, was the third one crayon coloring?   Since this has been brought up a couple of times already, does the tattoo business pay that well that we are concerned about phase outs or are tattoo people really good at finding spouses that make good money?  That could be an art form in itself :wink:

[TaxGuyBill]

Good point.  I didn't realize that a tattoo artist's income could be over the $157,500/$315,000 threshold.

[garman22]

The top guys could very well blow past those thresholds.....but good point. I assume the bulk of them dont come close.

[taxesbymetjr]

Thanks everyone for responding, a good Sunday question.  Keep everyone on their toes.  Good luck Monday the 28th...

[IRonMaN]

:+1: