Pet Grooming and Boarding Deductions: The Tables and Dryers, the Kennel Build-Out, the Mobile Van, the Tips on the Counter, and the Food You Buy for Other People's Dogs

A grooming salon is a room full of equipment that wears out fast — tables, tubs, high-velocity dryers, clippers and blades sharpened weekly — and a boarding kennel is a building with runs, drainage, HVAC built for animals, and a feeding schedule. A mobile groomer puts the salon in a van. The deductions are equipment, supplies, build-out, vehicle, and the people, with two issues specific to animal care: tips that are income to whoever receives them, and the retail shelf that turns a service business into a sales tax collector.

Equipment and supplies

| Item | Treatment | |---|---| | Hydraulic or electric grooming tables, tubs, lifts, cage banks | Equipment; Section 179, bonus depreciation, or the de minimis safe harbor for items under the threshold | | High-velocity dryers, cage dryers, clippers, trimmers, shears | Equipment, mostly expensed under the de minimis rule | | Blades, blade sharpening, combs, brushes, nail grinders | Supplies and maintenance | | Shampoos, conditioners, cologne, ear cleaner, towels | Supplies, deducted when bought | | Grooming software, online booking, reminder texts | Subscriptions, deducted as paid | | Kennel runs, gates, raised beds, feeding stations | Equipment or, when built into the structure, part of the build-out |

Equipment you owned before opening — a table from a home grooming setup — is depreciated from the lower of its adjusted basis or its fair market value on the date it is converted to business use.

The build-out

A leased salon's build-out — plumbing for tubs, electrical for dryers, drainage, flooring, HVAC — is qualified improvement property: 15-year property eligible for 100 percent bonus depreciation when acquired after January 19, 2025. A kennel's interior improvements qualify the same way when made after the building was first placed in service; the interior of a kennel the owner builds from the ground up is part of the 39-year building. The building itself, if owned, is 39-year property, and a kennel's exterior runs and fencing are land improvements (15-year, bonus-eligible). A cost segregation study on an owned facility separates the components. Leasehold improvements the landlord pays for through a tenant allowance are the landlord's, not yours.

The mobile van

A grooming van — a cargo or step van fitted with a tub, table, generator, water tanks, and HVAC — is used almost entirely for business, carries high costs, and is usually rated over 6,000 pounds gross vehicle weight: the actual-expense method and full first-year depreciation on the van and the conversion are the usual result. Trips between appointments are business miles; a log establishes the percentage. Generator fuel, propane for water heating, and the van's insurance follow the vehicle.

Boarding: food, bedding, and the facility

Food fed to boarded animals, bedding, cleaning supplies, and veterinary supplies kept on hand are supplies. A kennel that requires vaccination records and carries liability for animals in its care deducts its insurance — animal bailee coverage, general liability — in full. Daycare and boarding staff are employees. Deposits for holiday boarding are income when received (cash method) unless refundable and held separately.

Tips

Tips left for a groomer are income to the groomer. For an owner-groomer, tips are business income on Schedule C, subject to self-employment tax — and eligible for the 2025 law's tips deduction, capped at the business's net profit. For employee groomers, tips are wages: employees report them to the employer, the employer withholds and pays payroll tax on them, and tips paid through the point-of-sale system are run through payroll. The 2025 law's deduction for qualified tips — up to $25,000 a year for 2025 through 2028, phasing out above $150,000 of modified adjusted gross income ($300,000 joint) — is claimed on the worker's own return, and Treasury's final list of tipped occupations includes pet groomers and kennel workers (Pet and Show Animal Caretakers, code 506). It changes nothing about withholding or payroll tax: the employer still reports the tips as wages, and now also reports the cash tips in box 12 (code TP) of Form W-2 with the occupation code in box 14b (2025 was a transition year). Tips are not the business's income and not its deduction, except the employer's share of payroll tax on them.

Continuing education and certification

Certification programs, grooming competitions and seminars, pet first aid, and the travel to attend them are deductible as education that maintains or improves skills in the current business. Initial training to enter the trade is not.

Retail and Florida sales tax

Grooming, bathing, boarding, and daycare are services, not taxable in Florida — but the shampoo, food, and supplies the salon or kennel uses in those services are taxable when it buys them. Shampoos, brushes, treats, and food sold to customers are taxable goods: the salon registers for sales tax, collects on retail sales, and holds those products as inventory (or, under the small-business exception, as non-incidental supplies deducted when sold) rather than as supplies deducted when bought. Florida exempts prescription and veterinary legend drugs, but the flea and tick products and other over-the-counter remedies a groomer sells are taxable. A salon that sells nothing at retail has no sales tax account but should still separate any product sold with a service.

Worked example. A groomer opens a salon with $38,000 of tables, tubs, dryers, and cage banks and $22,000 of build-out (plumbing, electrical, flooring). The equipment is expensed under Section 179 and the de minimis rule; the build-out is qualified improvement property deducted in full under bonus depreciation. Shampoos and supplies run $9,600 for the year. She hires two groomers; their $18,000 of tips are reported through payroll as wages. A retail shelf of shampoos and brushes sells $14,000 — inventory for tax, and taxable sales for Florida, on which she collects and remits. Her own tips, $7,000, are Schedule C income.

Official sources

The IRS explains: “Generally, this is any improvement to an interior part of a building that is nonresidential real property, and the improvement is section 1250 property, is made by you, and is placed in service by you after 2017 and after the date the building was first placed in service by any person.” — Internal Revenue Service, Publication 946 (2025), How To Depreciate Property, https://www.irs.gov/publications/p946

The IRS explains: “Employers are also required to withhold taxes (including income taxes and the employee's share of Social Security tax and Medicare tax) based upon wages and tip income received by the employee and must deposit these taxes.” — Internal Revenue Service, Tip recordkeeping and reporting, https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting

Florida's sales tax rule states: “Charges for boarding animals or for grooming animals are not subject to tax.” — Legal Information Institute, Cornell Law School, Fla. Admin. Code R. 12A-1.0215, Veterinary Sales and Services, https://www.law.cornell.edu/regulations/florida/Fla-Admin-Code-Ann-R-12A-1-0215

Related guides

• Pet Grooming and Boarding Entity and Estimated Taxes: The Groomer Who Stays a Sole Proprietor, the Salon That Elects S, the Kennel in Its Own LLC, and the Holiday Boarding Quarter
• Dog Training Business Deductions: The Facility, the Equipment, the Yard at Home, and the Vehicle That Carries the Dogs
• Salon and Barbershop Deductions: The Chairs, the Product, the Tips, and the Booth Renter Who Isn't Your Employee
• Employer Tax Rules for Tips: Withholding and Reporting
• What Is Qualified Improvement Property (QIP)?

Next step

Fairlight Accounting handles U.S. domestic, cross-border (U.S.–Canada), and international tax returns, plus bookkeeping, payroll, and CFO advisory. Our U.S. Tax Desk sets up the build-out, the tip reporting, and the retail inventory so each lands in the right place from opening day. See pricing or book a free fit call.