TAX NEWS - 2010

Federal tax on tanning salons set to begin

Barbara Kunik says she has a better name for a new federal 10 percent tax that tanning bed users like herself will have to start paying.

"I think they need to change the name to the 'sexist tax,' " she said Thursday, after a relaxing 10-minute session under a set of ultraviolet lamps at Sun Source on North Reilly Road.

To help pay for the $940billion health care reform bill that President Obama signed into law in March, Congress slapped a 10 percent tax on people who use indoor tanning beds. It takes effect Thursday.

The industry says 75 percent of tanning salon owners are women. Most of their customers are female, too.

Kunik said men dominate the Congress that wrote the tax into the bill. She said she is disappointed in Obama.

"Well, who is he targeting?" she asked. "Small businesses."

Jennifer Walker, who owns and runs Sun Source, has posted signs about the new levy. One note encourages people to buy tanning packages before Thursday; it reads: "Beat the tan tax."

Walker said most of her customers have giggled or laughed when told about the new tax. They still want to get their artificial glow.

"I think the people that tan enjoy it and will continue to do it," she said. "It's a beauty thing. It's like buying makeup."

A monthly pass, which entitles the customers to visit once a day, costs $42 at Sun Source. With the new federal tax, a monthly package will cost Walker's customers $46.20.

Because tanning is considered a service and not a product, the state and local sales tax is not added. The new federal tax will not apply to sunless tanning options, such as spray tans or tanning lotions, which are subject to the sales tax.

Sonny Dang, who manages Tan Bunz on Cliffdale Road, has mixed opinions about the new tax.

"Government needs more funds," he said, adding: "It's a little bit too excessive."

He doesn't think people will stop tanning, at least not in this market, he said.

Jordan Thorne, who works at Hot Tropix on Ramsey Street next to Methodist University, said the tax is unfair and could hurt business.

"They are basically saying right now tanning can hurt you," she said. "This is a multibillion dollar industry. It's a cosmetic industry."

In April, the World Health Organization issued a report sounding an alarm over the rising use of tanning beds. The authors said exposure to ultraviolet light, regardless of the source, increases the risk of skin cancer. They contradicted claims that tans provide health benefits. They recommended banning children under 18 from using tanning beds and providing operators more training.

John Overstreet, executive director of the Indoor Tanning Association, said moderation is the key. The trade group represents manufactures of tanning beds and retailers.

"It's just like being in the sun," he said. "The same risks and the same benefits apply. Obviously, there are some groups of people - those with freckles, light skin - that should be careful."

When Congress was haggling over the details of health reform last year and how to pay for it, they considered taxing breast implants, tummy tucks and the like. The so-called "Botax" was fought by the medical and cosmetic industries, which have lobbying power. Congress backed down and came up with the tan tax instead, Overstreet said.

Congress has estimated the tax would raise $2.7billion over 10 years. Overstreet said that's just a guess. The industry has about 20,000 tanning salons in the U.S., plus another 10,000 tanning beds in health spas and clubs.

He said this is an example of "nanny government trying to control your behavior, and to me that is not the role for government. People should say, 'Wow, if they'll do that, what are they going to do next?' "