TAX NEWS - June 2010
Federal tanning tax starts in July
That's what melanoma doctor R. Dirk Noyes wants to see. It's a goal based on years of treating young women with the deadliest form of skin cancer.
"I see about 15 new melanoma patients a week in my practice," said the co-director of Huntsman Cancer Institute's Multidisciplinary Melanoma Clinic. "A large percentage of those are young women and a large percentage of those are from frequent tanning."
Outdoor tanning is to blame, with Utah's elevation providing more intense sun exposure to its largely fair-skinned population. But so are ultraviolet rays from tanning booths, Noyes maintains.
"There isn't any question that especially young people ought to stay out of the tanning booths. The link is there," he said, referring to new research tying tanning beds to melanoma.
The tax on tanning services starts July 1. It was approved as part of the federal health care reform bill passed in March and is expected to raise $2.7 billion over 10 years, money that will expand health insurance coverage.
The tax applies to time spent in tanning beds but not spray-on tans. It replaced the so-called 5 percent "Botax" that would have raised $6 billion on cosmetic surgeries.
The Indoor Tanning Association is urging a repeal. John Overstreet, the Washington, D.C.-based group's executive director, said salon owners have received no guidance from the IRS on how to collect the tax. It's an administrative hassle because many clients buy passes and it's unclear how those would be taxed. Would owners have to collect taxes on passes purchased earlier in the year?
"I don't think a business can raise their prices by 10 percent and not have it affect business," he said.
"It's hitting a group of people who are not big wage earners to start with," he added, referring to a customer base that is primarily women in their 20s.
Twenty-two year-old Aiko Suitt wasn't aware of the tax and said it would probably lead her to choose a less expensive tan, around the $5 range.
"I wouldn't want to pay an extra dollar to go tanning," she said after tanning at a salon in Sugar House. "But it goes to a good cause."
Myra Guerrero was a reluctant tanner anyway -- "I'm scared about the whole cancer thing" -- but was persuaded to go by a friend. The tax means the 21-year-old will seek her rays directly from the sun.
"If there's a tax on tanning, I will definitely stop," she said, adding the $10 she spent was "a lot of money."
Mangers of tanning salons across Salt Lake County have mixed reactions to the tax.
"It's going to stop people from coming in and hurt the business," said Megan Syphus, owner and manager of Electric Beach in Taylorsville.
Individual sessions cost $4 to $15, but where the tax will really matter is on passes, which cost up to $189, she said.
"It's an extra $19 [for the tax] and people come here for themselves. They'll probably feel guilty," she said, adding she plans to add another air-brush gun for a spray-on tan since it won't be taxed.
"It's ridiculous," Norine Byrd, manager of Midvale's Body Bronze Tanning, said of the tax. Even an extra $3 per session hurts, she said. "People don't have as much money to spend on recreational things like tanning."
Kelli Pearson, manager of Sun Your Bunz in West Valley City, disagrees. "People still want to feel good about themselves."
Neither the tax nor the latest research linking indoor tanning to cancer will scare away minors, she predicted.
"What I tell people is it hasn't been proven," she said. "These people they're studying, they haven't been locked inside a building for 20 years. Obviously they're going outside and they're getting sun as well."
Pearson doesn't worry about the cancer risks for herself or her 12-year-old daughter, who uses the beds up to twice a week.
If Pearson gets skin cancer, she says it will be from baking outside while basted in baby oil when she was young, not from her twice-weekly indoor habit.
A 2007 Utah law requires tanning salons to obtain parental permission for minors who want to tan. There are no age limits.
The Salt Lake Valley Health Department, which inspects the businesses, doesn't track the number of youths who tan. National estimates show teens make up 8 percent of the 28 million indoor tanners.
Other states and countries have restricted youth access, with California banning them for teens younger than 14 and Texas younger than 16.5, according to the Skin Cancer Foundation.
There is movement toward more restrictions, with the tax coming on the heels of research linking indoor tanning to melanoma. Youth bans are proposed in Massachusetts, New York and Ohio.
» An FDA panel in March unanimously recommended the FDA re-classify tanning devices from Class 1 medical devices such as tongue depressors to either Class II or III and possibly restricting access to teens.
» Last July, the International Agency for Research on Cancer, connected with the World Health Organization, added UV radiation from tanning beds to a list of agents labeled "carcinogenic to humans." The list includes plutonium, tobacco and ultraviolet rays from the sun.
The group also recommended minors be barred from using the beds.
The designation came after reviewing studies showing tanners who start using beds before age 35 have a 75 percent increased risk of melanoma.
» A study published last month found that indoor tanners in Minnesota had a 74 percent increased risk of melanoma. The risks grew the more people tanned indoors.
Overstreet, of the tanning association, doesn't dispute that tanning beds pose the same risks as the sun. But he said the risks are highest for certain groups, including the fair-skinned and freckled.
"There are millions of people who are in the sun [and tan indoors] who don't suffer from skin cancer," said Overstreet, whose group is fighting proposed youth restrictions.
"Whether or not a kid gets a suntan to me is not a decision for the government. What's the next step? Are you going to ban people from taking their kids to the beach?"
Noyes, the surgical oncologist, acknowledges the link between melanoma and tanning beds isn't as conclusive as the one between smoking and lung cancer. Studies would need to show ultraviolet rays turning on melanoma cells, he said.
"We don't have the direct link like nicotine and lung cancer yet, but we're getting there," he predicted.
But teens probably won't care, he said. Warning them about premature aging is a better anti-tanning selling point. "We have a long way to go until we realize tan is not beautiful."
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