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The Atlanta Journal-Constitution, Tuesday, March 30, 2010, Page A13 Business Section
(http://www.galleryoflights.org/mb/gallery/albums/userpics/normal_tanning.jpg)
Tanning tax unfair, salon owners says
Health care measure includes a 10% fee.
Government expects to bring in $2.7 billion over 10 years.
By David Markiewicz
The new federal health care act is supposed to help small businesses, but one industry says a little-publicized provision in the law will only bring it pain.
Tanning salons will be hit with a 10 percent tax on their services starting in July, a levy the government said will raise $2.7 billion over 10 years.
Salon operators say they are being singled out and that the tax -- which they say they will be forced to pass on to customers -- will cost customers and force some owners, many of them small independent entrepreneurs, out of business. There are about 20,000 indoor tanning salons in the U.S.
"It's patently unfair, and 10 percent is abusive," said Jamie Schachter, owner of four Hollywood Tans franchises in metro Atlanta.
John Overstreet, executive director of the Indoor Tanning Association, said he knew of no other industry hit by a special tax in the health care bill. He also said the tax would raise nowhere near $2.7 billion.
Indoor tanning sessions vary in price, but at fairly typical cost of $30, a customer would pay $3 more per visit if the tax is passed on. That might not seem like much, salon owners say, but many clients are younger with small incomes, and some tan often enough that it can make a dent.
"It will certainly affect business," said Overstreet, calling indoor tanning a luxury item dependent on disposable income.
The so-called "tan tax" grew out of the so-called "Botax" a proposed 5 percent levy on elective cosmetic surgery that originally was in the legislation. The tax, on services such as Botox injections, was removed after lobbying by plastic surgeons, the maker of Botox and
"Their premise is this is a sin tax. ... They're disguising it by saying they will lower health care costs because people will get less cancer."
Alex Royter
Owner, Solar Dimensions
the American Medical Association.
The tanning industry, led by the ITA, fought the tan tax, but it stayed in the bill.
Salon owners say the tax was sold as a way to reduce tanning.
"Their premise is this is a sin tax and people shouldn't be tanning," said Alex Royter, owner of Solar Dimensions, which operates 13 salons in metro Atlanta under the names of Solar Dimensions and Solarium. "They're disguising it by saying they will lower health care costs because people will get less cancer."
They tanning industry has been under siege by critics who cite the risk of skin cancer to tanners.
Dermatologists called indoor tanning a known carcinogen and said the tax might someday reduce the incidence of skin cancer.
The AMA opposed the Botax, and after it was replaced with the tan tax the group announced it supported the bill.
Salon operators and tanning advocates say controlling exposure is the key to safe tanning and that many people need the health benefits of the Vitamin D that come from ultraviolet light provided by salon tans.
Schachter said, "If you want to tax something that's going to have a positive effect on our nation's health, tax the fast-food industry. They won't do that, of course."
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The Atlanta Journal-Constitution, Saturday, July 03, 2010, Living Section, page D1
10% tax catches tanning salon clients off guard
By Nedra Rhone
The "tan tax" took effect Thursday with a 10 percent tax on some tanning services. But the little publicized provision, which is part of the new federal health care act, has caused some confusion.
Regulations from the Internal Revenue Service on how to collect the tax were no issued until June 15, said Jamie Schachter, owner of the four Hollywood Tans in the Atlanta area that service about 70,000 customers.
"About 50 percent of our customers have been shocked when we told them. We have to explain it to them," said Michelle Rogers, manage of Hollywood Tans at Toco Hill.
The tax, expected to raise $2.7 billion over 10 years from 20,000 indoor tanning salons around the country, stemmed from a "botax" - a proposed 5 percent tax on elective cosmetic surgery that was removed from the legislation after pressure from plastic surgeons, the makers of Botox and the America Medical Association.
While the tax has not yet had a huge negative impact on larger local chains, here hare some things you should know:
- The 10 percent tax applies only to services that use ultraviolet radiation with wavelengths in air from 200 to 400 nanometers. It does not include spry tans or airbrushing such as Mystic Tan.
- Gyms and fitness centers with tanning services are exempt, as are medically related UV services conducted in doctors' offices such as phototherapy to treat skin conditions and seasonal affective disorder.
- The tax is collected when you pay for the service or package, not when the service is rendered. If you are buying package that combine UV services with non-UV services, that salon should tax at the rate below 10 percent.
- Inquire about specials. At Hollywood Tans, Schachter doubled the rewards program to 10 percent to help offset the tax on certain memberships from $15 to $100.
- Object to tax? Visit www.repealtantax.com sponsored by the Indoor Tanning Association to make your voice heard.
By the numbers
20,000
Approximate numbers of tanning salons in the United States.
$2.7 billion
Amount of money that the federal government expects the 10 percent tax on indoor tanning to raise over 10 years.
75%
Percentage increase in the risk of melanoma that as attributed to the use of indoor tanning beds, according to the American Academy of Dermatology.
Source: news services