Small business says 10 percent tanning tax that starts today is overcooked

As of July 1, tanning salons have to charge customers a 10 percent tax on their services to help pay for part of the new health reform law and that requirement has attracted the howls of small business, NPR reports. "Tanning salon owners are outraged. They say the new tax is the last thing they need in a struggling economy. But dermatologists hope the new tax will deter indoor tanning — which they say is every bit as dangerous as baking in the sun — the same way tobacco taxes have helped cut down on smoking." A tanning salon trade group, the National Federation of Independent Business and the International Franchise Association said the tax could hit 18,000 small businesses. It is expected to raise $2.7 billion during the next 10 years (Rovner, 7/1).

The Philadelphia Inquirer: Tanning "enthusiasts" say the tax won't deter them. Some say "a few dollars tacked on wouldn't deter them. That's good news for the multibillion-dollar tanning industry. But advocates of the tax hope it will prompt more of a response than a simple recalculation of costs. … Seventy percent of the estimated 1 million tanning-salon users nationwide are women between ages 16 and 29, [University of Pennsylvania Vice Chairman of the dermatology department William] James said. The risk of melanoma increases 75 percent among people who use tanning beds before age 30, according to a report published last year by the International Agency for Research on Cancer. The document labeled UV-emitting tanning beds as carcinogenic"  (Conaboy, 7/1).

The Wall Street Journal: "It's a universal truth in Washington: There's no such thing as a simple tax. Free tans at video-rental stores might be taxable, but tanning services offered by health clubs mostly aren't, thanks to a late exemption. Ultraviolet tans are taxed. Spray tans aren't. Tanning salons are fretting over how to calculate unlimited memberships that combine taxed and non-taxed tans. Customers, meanwhile, have been racing to cram in tanning sessions to avoid the levy." Other similar taxes, like one on cosmetic surgery, were scuttled by lobbying, but there was no such luck for the tanning businesses (Adamy, 7/1).

CBS News: "An estimated 30 million Americans use tanning beds each year — 2.3 million are teenagers. It costs about $17 a visit. The 10 percent tax will raise that price by $1.70. It is unclear whether that will be enough to discourage indoor tanners. What is clear, new research finds indoor tanning before the age of 35 increases the risk of melanoma by 75 percent. … The industry argues tanning is safe in moderation. But doctors say fake tanners are the only safe choice for people who want that summer glow without the risk" (Miller, 6/30).

Meanwhile in Congress, Rep. Dave Camp, the senior GOP member of the House Ways and Means Committee, "reiterated his concerns that the Internal Revenue Service (IRS) hasn't warned the nation's tanning salons of an imminent tax," The Hill reports. In a June 11 letter to the IRS, Camp asked what steps were being taken to notify businesses and consumers of the additional costs. "Camp's office said Wednesday: 'The IRS has yet to explain why it has not notified tanning operators about this tax.' Republicans have criticized the tax, arguing that it will burden businesses at a time when unemployment sits near 10 percent" (Lillis, 6/30).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.