Tanning Tax Takes Effect July 1
A new tax goes into effect this week that will have an effect on one sector of small businesses: the tanning salon. Those businesses that offer both spray-on tanning as well may be less affected, but those that only offer indoor tanning beds may see a drop in profits. The tanning tax, implemented as a way to help off-set costs of the health care reform bill begins July 1, in all 50 states.
The 10 percent excise tax on indoor tanning beds takes effect July 1, 2010. The IRS instructs business owners to collect the tax at the time the purchaser pays for the tanning services. The provider then pays over these amounts to the government quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return. This tax is expected to net the federal government about $2.7 billion over the next 10 years, according to CBS News.
CBS also reports that the numbers of indoor tanners are high, or they were before the tax. Nearly 30 million Americans use tanning beds each year and some of those, about 2.3 million, are teenagers. An average cost is about $17 a visit, so the tax will run consumers about $1.70 per tan. Since the tax is relatively low, it may not discourage those who love to tan. However, other efforts by the government might.
Salon owners should also be aware of the growing concern over the rising rate of melanoma. CBS reports new research finds indoor tanning before the age of 35 increases the risk of melanoma by 75 percent. New public service announcements are taking aim at teen tanning - and so are state legislators. At this time, 32 states restrict it by requiring parental permission in person for those under a certain age. New York state is considering a total ban on tanning bed use for anyone under 18.
The tanning bed industry argues tanning is safe in moderation. But doctors say fake tanners are the only safe choice for people who want that summer glow without the risk.
Actions like those may prove to be a hit to salon and tanning businesses, and so would a shift in attitudes toward indoor tanning beds. CBS asked melanoma victim and tanning fan Gisselle Colon what advice would she give to women going to tanning salons?
"Stop immediately," she said.
Related Resources:
- IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1 (IRS.gov)
- New Tax on Indoor Tanning Goes into Effect (CBS News)
- Tanning Beds Cause Cancer, Says Cancer Authority (FindLaw's Common Law)
- Sales and Use Tax (FindLaw)
- FAQ: Tax Law (provided by Kundra & Associates Tax Attorneys)
- Tax Law News (provided by Law Offices of Jeffrey S. Freeman)
