July 01, 2010

A dark cloud is descending over the indoor tanning industry – or so the industry would say. The tax on tanning services that was part of the Affordable Care Act signed into law by President Obama in March went into effect July 1.

Photo credit: Flickr user Kevin

Tanning business owners have generally railed against the tax saying that it may spell the end of many small businesses. The Nebraska Indoor Tanning Association even planned a rally at the State Capitol building in Omaha this morning to protest.

Despite any protests, it looks like tanning salons will no longer be operating in a relatively unrestricted environment. Just ahead of the tanning tax effective date, the American Academy of Dermatology Association (AADA) listed all its past and potential future victories in limiting the use of indoor tanning beds in a press release.

In it, AADA President William D. James said that federal, state, and local efforts “send a clear message to Americans, especially young people, that tanning is not safe and that a tan is not a sign of good health.” Dr. James added that, “Indoor tanning is an unhealthy activity and UV radiation exposure increases one’s risk of skin cancer.”

The Obama Administration, through the Internal Revenue Service, is taking that message to the doorstep of the salons, which in turn, will be passing it on to tanners. According to the IRS, the 10% tax is collected at the time of service. The salon then must file that remittance with tax forms, quarterly. 

Phototherapy is exempt if it is performed by “a licensed medical professional on the medical professional’s premises.”

There is an alternative for tanning salons worried about losing business: they can simply switch their product offerings to include spray-on tanning or lotions or creams that simulate a tan – those safe, non-carcinogenic (as far as we know) methods aren’t subject to the tax.

-- Alicia Ault, on Twitter @aliciaault

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