Federal tanning tax to raise health funds begins as new state laws also go into effect
Starting today it will cost more to go to a tanning salon. A 10 percent excise tax goes into effect as part of the funding mechanism for the new federal health care bill. Charging indoor tanning customers the extra fee is expected to raise $2.7 billion over 10 years, according to industry statistics.
With some calling it a "sin" or "luxury" tax, many salon owners are calling it an unfair tax.
Barb Davis, owner of Daisy Fields, a tanning salon in Willmar, said she wouldn't mind so much if the tax was applied to all indoor ultraviolet tanning services, but she said there are exemptions that make the tax unfair.
Davis said the tax targets only tanning salons and that other businesses that have tanning beds as a sideline won't have to charge customers the tanning service tax.
For example, under IRS guidelines, "qualified" fitness centers that offer tanning beds as an incidental part of their business are exempt from the tax.
Davis said she's in favor of people paying their fair share in taxes, "but then it's got to be fair" and that anyone selling tanning services should have to pay the tax.
Tanning salons were "unfairly singled out" as targets for the tax, said Michael Ziebell, of Spicer. He is a partner with his daughter, Kristin Johnson, who owns and operates the Endless Summer Tanning Studios in Willmar and Alexandria.
The original bill included taxing other services such as plastic surgery and botox injections, but those were ultimately dropped from the final bill.
Tanning salons will be required to collect the 10 percent tax from customers when the service is provided and make quarterly payments to the Internal Revenue Service. The federal tax, which will go to help pay for programs in the Affordable Care Act, is on top of any state and city taxes.
While some argue the federal tax on indoor tanning is justified because of potential health risks with skin cancer, Davis and Ziebell say UV tanning has gotten a bad rap.
Ziebell said their business has trained staff, clean, modern equipment and rigid safety rules in place to protect customers.
Their salon can provide "a much safer tan than being exposed to the natural sun," said Ziebell. "The government just doesn't know how to tax the sun yet."
Ziebell said so far they've not received any communication from the IRS on how to process the taxes.
He said their business will comply, collect the tax and then "hope the bureaucracy catches up with the law."