“The Genie isn’t going back in the bottle” – Tim Hendricks

Tattooing has long been a fringe business operating on the edge of acceptable society.  The past 20-30 years has seen tattooing become much more common, acceptable, and mainstream.  It’s not unusual to see a tattoo studio inside a shopping mall or inside a casino. All sorts of people have tattoos and the days of it being outlaw, antisocial, and criminal are behind us.  Popular television shows have thrust tattooing inside family living rooms and a generation of children have grown up watching tattooing from the comfort of their living rooms on weekly shows.  

Globally the tattoo business is over a billion dollar a year industry and is projected to grow to 3.5 billion by 2029.  The IRS has not ignored the tattoo industry.  The IRS has added over 80k new agents and is requiring any transaction of $600 or more to be reported for tax purposes.  In the mid 2010’s my company researched sponsoring foreign artists to work.  We had many applicants from Asia, South America, and Europe. In our research we discovered that the IRS knew the average pay tattooers should make.  The visa application said we have to pay the prevailing wage.  We asked what the prevailing wage for a tattoo artist in our area was and were told it was $750 a week.  We calculated that based on the average the artists we had working for us and it was almost exact!  It was at that point we knew the IRS was acutely aware of how much money tattooers made and how much they expected to get paid in taxes.

The trend of offering the W2 option probably began in a state like California where tax and labor laws are very strict.  I remember Pat Fish offering the employee option in the late 2000’s. Our studios in Wisconsin were audited and we were told that any independent contractors MUST be incorporated (LLC, S-Corp, etc) in order to legally be a 1099 contractor.  We were forced by the state to convert to a W2 employee or the contractors must become incorporated to get a 1099.  In about 2015 we were audited by the IRS as a result of the Wisconsin audit and were told that all body piercing staff were legally employees.  Tattooers were legally classified as independent contractors because they had to compete with each other for clients in the studios, bought enough of their own supplies, and the historical relationships of artists and shop owners. It was after the standard minimum deduction was increased to $12k in 2018 and the COVID pandemic when 1099 contractors received no support from government during the shutdowns did many of our tattooers decide that W2 was the best option for working.

Since the conversion to W2 the tattooers who elected that option had better options for retirement, purchasing a home or a car, and less headaches in general.  Our company offers 401K with a 6% match, which is a much better option than the traditional tattoo artist retirement plan of working until you die. No doubt the government prefers that the taxes are collected by employers from each paycheck rather than having individuals pay a lump sum once a year. The days of flying under the radar in the fringes of society for tattoo artists are long gone.  As the entire world moves more towards a cashless society and governments experiment with Central Bank Digital Currencies, the chances of tattooing to remain off grid are diminishing rapidly.