TAX NEWS - June 2010

Salons not happy about tan tax

MISHAWAKA — Tanning salons are about to feel the burn of a hefty federal tax. It's designed to help raise billions for the new federal health care bill. Tanning salons across the area say the tax is simply unfair and it's only going to hurt small businesses.

"The government's always talking about they want to help small business owners and this is what they do to us," Owner of Mishawaka based Sunrise Tanning, Dave Morris said.

Even without a tax, Morris is already feeling the heat of being a small business owner.

"I work 65 hours here just to make ends meet," Morris said, "They take 10 percent off of that. It's going to be really hard."

He and many other owners of tanning salons say that 10 percent is going to be pushed onto their customers and could have a negative impact on the industry.

"It's going to have an effect on business. We're hoping the effect will be minimal," President of Fun Tan, Dan Skwarcan said, "If the business affect is sizeable, we're talking about laying people off."

With 40 employees at Fun Tan, workers there are worried about the future of their jobs.

"You're always on your toes because you never know what's going to happen. If business really starts to slow down, I could lose my job," employee Jillian Frank said.

Originally the health care bill didn't contain a tanning tax, but proposed taxing cosmetic surgery.

"Really the only people who can afford cosmetic surgery are high income people. (It) was replaced with a tax on tanning, a pleasure, a luxury to middle and low income people," Skwarcan said.

This tax starts on July 1, and the goal is to raise $2.7 billion in 10 years to help cover uninsured Americans.

Dermatologist Holly Harris said tanning beds can be harmful but she doesn't know if taxing the salons is the answer, but the taxing may help to raise awareness about certain tanning dangers.