Federal Tax Watch
New law taxes indoor tanning services
The Jersey Shores guys may be without the "T" in their GTL (Gym Tan Laundry) status if new taxes on tanning make a visit to indoor salons too costly.
Congress has imposed a new law that imposes a 10 percent excise tax on indoor tanning services.
The tax will be paid by the individual for whom the tanning services are performed but will be collected and remitted by the person receiving payment for the tanning services. This new law is effective July 1, 2010, so keep the "T" going strong until then.
The new law was imposed to help fund the $940 billion healthcare overhaul. Congress expects it to generate $2.7 billion over the next 10 years.
The average cost of a tanning session is roughly $30 per visit. The new law would impose a $3 increase per monthly bill, which averages out to be an extra $36 per year of tanning.
Tanners state that going to a tanning bed lets you maintain sufficient levels of Vitamin D. This keeps people happy and feeling good about themselves.
This new tax may put tanning salons in jeopardy of losing consumers and perhaps cause some tanning salons to shut their doors.
Congress may have missed a beat on this tax because the tax was not imposed on the sunless tans that have become popular in the celebrity world.
While President Obama hopes to increase the number of Americans in the workforce, this new law may actually decrease that number. Tanners have started a new nonprofit program to try to fight this law.
The tanning tax replaced the "Botox tax," which was a proposed 5 percent tax on cosmetic surgery that was originally included in the bill. The tax was intended to be imposed on Botox injections and breast implants, among other elective surgeries. But these taxes were cut out of the bill last year after heavy lobbying from the medical and dermatologic industries.
The Botox tax was expected to generate $5.8 billion, more than doubling the amount of the tanning tax. The Botox tax actually may have made more sense because it would have targeted wealthier Americans.
Congress should have taken into consideration the fact that Americans spend about $1.8 billion treating skin cancers each year – $300 million on melanoma alone. This tax will significantly reduce the future costs of treating skin cancers.
Next up for Congress?
It may consider a vote on a bill to tax fast-food vendors on the unhealthy food they serve you.
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