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Feds now tax your tan

New kind of sunburn: Some are unhappy with tanning tax that helps finance health care reform.

By Karen Datko Jul 1, 2010 6:10PM

This post comes from Truman Lewis at partner site


We've been told over and over that too much time on the tanning bed is bad for our skin. Now it's bad for our wallet as well, as the federal government's new 10% excise tax on indoor tanning services became effective July 1.

It's the first of 21 excise taxes created by Congress to help pay for the health care overhaul that was passed a few months ago. Congress calculated that it would be able to sweat about $2.7 billion out of tanning taxpayers over the next decade.


Since it's Congress we're talking about, nothing is quite as simple as it sounds. First of all, the tax -- like all taxes -- doesn't apply to everybody. It applies only to tanning salons and other establishments that charge a fee for tanning.


Who doesn't have to pay? Health clubs. Industry lobbyists successfully sought an exemption for health clubs -- "qualified physical fitness facilities," in the language of the bill -- that include tanning services as part of their monthly membership fee. Nor does it apply to "phototherapy services" performed by a licensed medical professional.


The tanning tax is making many small-business owners turn pale. There's been next to no information distributed to local businesses, and many complain that the software they use to run their cash registers and credit card operations has not yet been modified to collect and account for the new tax.


Grover Norquist, president of Americans for Tax Reform, gets red in the face when he says the new tax violates President Obama's pledge not to raise taxes on families making less than $250,000.


"Small-business owners across the country have already been feeling the financial and paperwork burdens caused by the tax, with some shutting their doors and others laying off employees," Norquist said. Estimates from the Indoor Tanning Association show that well over half of tanning salon owners are women, he added.


In California alone, there are 1,912 tanning facilities estimated to employ 6,840 people, serving 1.1 million Californians who think they don't get enough sunshine buzzing around the Southland, Inland Empire and Bay Area.


Like all excise taxes, there's no requirement that the tax be passed on to the customer, but businesses are unlikely to eat the added cost themselves.


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