TAX NEWS - 2010

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Tan tax worries local businesses

A 10 percent hike on tanning services has some students and a local tanning salon owner worried about the possible sting to their pocketbooks.

Jason Renn, owner of Malibu Tanning Salon, says the tax will hurt his business.

"Anytime there is a price change or an implemented tax, that does scare people away, especially college kids," Renn said. "I think it will have an effect on my business, how big of an effect only time will tell."

The federal tax on indoor tanning services, which went into effect July 1 as part of the recently passed federal Health Care Reform bill, applies to tanning devices that emit wavelengths of at least 200 nanometers. Other sunless tanning options such as spray tans and tanning lotions are not included. The government estimates the tax will produce $2.7 billion in revenues in the next 10 years.

The tax joins the list of other so-called "sin taxes" levied by local, state and federal governments, on products such as cigarettes, alcohol and soda pop.

According to reactions from Pitt State students like Sarah Rocco and Carlee Norris, tanning-salon owners like Renn may have reason to worry.

Rocco says the tax would have a negative effect on her decision to tan or not.

"That's why I never tanned very much in the first place," Rocco said. "Because it costs too much money."

Still, she says she disagrees with the tanning tax.

"I don't really think it's a right place to put taxes," Rocco said. "It's a luxury for people to relax, the 10 percent tax is kind of high."

Norris says because she works at a tanning salon she does receive a discount. However, if it were not for the discount she says she probably would not be able to tan there.

"I would say it would affect where I tan," Norris said. "I am a poor college student."

Renn says he has raised his prices to include the tax. A monthly tanning package that used to cost $25 is now $30.

"All rates have gone up 10 percent, which will not be going to me but to the federal tanning tax," Renn said. "What it means for my business, I'm really not sure. In the past year a lot of things have happened because of the tanning tax. The tan-salon industry has gotten a lot of negative publicity. I'm down about 18 percent."

But Renn says he is not sure if the decline is caused by the economy or bad headlines.

"We're in a lose-lose situation right now," Renn said.

Not all Pitt State students are opposed to the tax. Lauren Hiatt and Kristen Wiles both say they understand why indoor tanning is being taxed.

"I support it just because tanning is dangerous," Wiles said. "I know it's something that is a big industry, but if that extra 10 percent is helping cancer research or health care then I support it."

Wiles says she used to work in a tanning salon and remembers that customers had to sign waivers when they began tanning.

"You have to sign a waiver saying you understand it's bad for you," Wiles said. "So you should be willing to pay that extra 10 percent to help."

Although she supports the tax, Hiatt says she does not believe it will stop people from tanning.

"It makes sense because of the health risks involved," Hiatt said. "Most people are going to be willing to pay for it because it's something they're addicted to, just like cigarettes."

Renn says he believes the tanning tax may be the beginning of an effort to slowly run tanning salons out of business.

"This tax has been implemented to help with the health-care bill, but I just don't actually see this being able to fund the federal government to what they think it will," Renn said. "It is obviously going to slow down business for all tanning salons.

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