TAX NEWS - 
2010
US Tanning Tax: Most will pay 10 percent tax to stay tan using indoor facilities
Federal health care reforms enacted in December include the tax, which the Joint Committee on Taxation estimates will generate $2.7 billion during the next decade to help offset costs associated with implementing other components of the legislation. The American Academy of Dermatology and other anti-tanning camps also hope the price increase will discourage the controversial practice.
They have not met Elizabeth Costello.
The 36-year-old mother of two said she tans seven months out of the year — "not very often" — but didn't know about the tax until less than a week before its start.
When she heard the news, Costello had just stepped out of a bed at the Island Sun tanning salon in Mays Landing, her hometown.
"Why?" she asked as her eyes narrowed.
After the details registered, the Mays Landing resident decided that the convenience and aesthetic appeal of indoor tanning are worth the surcharge, which she described as a luxury tax.
"I don't go very often, and I could do without it if I needed to. But (the tax) won't make or break it," she said.
Many clients of the roughly 50 tanning spas in southeastern New Jersey expressed similar sentiments about the looming levy.
Some of them have donned goggles — or "winkies," as the disposable foil eye protectors are known — and slid under the lamps since adolescence.
Since then, the source of that pre-prom tint has often served as skin-clearing remedy, post-breakup mood boost and an indispensable prep for weddings, spring breaks and swimsuit seasons. They, and owners of more established salons, figure they can probably come up with another dollar for every 10 they spend on a habit formed despite sunburns, skin cancer blame campaigns and the distinctive, post-session scent of toasted skin and perfumed lotion.
Tax may price out young
Costello swears by high-pressure, or HP, tanning beds. They purportedly emit a small fraction of UVB, the most damaging ultra-violet radiation. But regulators remain unconvinced of the technology's relative safety and they strictly dictate how proprietors can explain the distinction.
She estimated she spends about $200 every year on HP sessions. For her, the $20 surcharge is insignificant, she said.
"But a lot of people who come here are in their 20s, or they're teenagers — I could see it affecting them," she said.
Enter 20-year-old Ginna Petrillo, also of Mays Landing and an Island Sun client. With her studies at The Richard Stockton College of New Jersey suspended for the summer, Petrillo said she's juggling a lifeguarding gig and unpaid advertising internship. On her tight budget, the tax might make blending tan lines cost-prohibitive, she said.
"It would make a difference," she said. "It would cancel out the (savings) of buying a (bulk) package."
Petrillo could opt for a professionally applied bottle bronze via an airbrush technician or spray machine. Such treatments are exempt from the tax. But they are more expensive than tanning beds, with or without the surcharge. And for Petrillo, Costello and others, prior experience could sway them toward sticking with tanning beds and their exclusive infusion of light and heat.
"It helps boost my mood and it feels good," Petrillo said.
That inclination — one that critics say puts Petrillo and others who tan indoors at the top of what could be the slippery slope of addiction to the practice — is echoed by many clients Carly Flannery encounters while stationed at Island Sun's hibiscus-strewn front desk.
"A spray tan, it's instant, but they say it's not as relaxing, or they're under doctor's orders to go in a bed," the 19-year-old Galloway Township resident said, referring to the skin and mood disorders that can benefit from sun lamps.
Smaller salons
Brian Petruzzi, who owns the salon where Flannery works and five other Island Sun sites in Atlantic, Ocean and Cape May counties, isn't worried about the tax, either. But his security has nothing to do with any affinity his clientele might hold for the bulbs versus the bottle. Rather, the 30-year-old draws security from revenue figures that show clients spend on both services, plus lotion and other extras sold on-site, he said.
"It's not a majority of our overall sales," he said. "Some smaller stores will probably go out of business. But in the end, we'll be busier because of that."
Owners of those smaller salons, such as Greg Rhoads of Galloway-based Tiki Tan, admit the nine-store Island Sun franchises are relatively dominant in the local market. They also acknowledge that the tax will compound the struggle to sustain a luxury business during a recession, Rhoads said.
Tiki Tan customers book a collective 10,000 sessions every year, about 1 percent of Island Sun's chainwide tally, according to numbers provided by Rhoads and Petruzzi.
Although Rhoads, like Petruzzi, does not welcome the tax, he thinks it won't do much additional damage to the tanning industry, already weakened by the economy and negative attention from media and interest groups that publicize links between indoor tanning and cancer, Rhoads said.
"Every business is dependent on the economy, not as much on taxes. Americans are used to getting taxed," Rhoads said.
Still, the downturn has left most small business owners in the tanning and other industries in a position too precarious to discount any additional financial stress, according to Joseph Levy, vice president of International Smart Tan Network.
"For a number of businesses on the brink, this (tax) will put them over the edge. It's the wrong time to put tax of that magnitude on a small business," Levy said.
Smart Tan was among the industry lobby that failed to convince Congress to delete the provision from the health care reform bill last year. The Indoor Tanning Association, another participant, has since started a repeal campaign.
"Tanning is here to stay," Levy said. "There's not a doubt."
Tanning tax facts
What: 10 percent surcharge for tanning in booths and beds
Where: Tanning salons nationwide. The surcharge does not apply to tanning beds and booths in gyms, health clubs and other facilities that are not tanning-specific.
When: Starts Thursday
Why: The surcharge is among the federal health care reforms approved in December and could generate as much as
$2.7 billion during the next decade to help offset the costs to implement some of the legislation's other components.
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