Ultraviolet light does not do anyone’s skin any favors, even when it imparts an attractive tan. And skin does not care whether light of a particular wavelength comes from a nearby star or from a fluorescent tube.
But the Internal Revenue Service cares. Since July 1, the IRS has cared a lot.
The recently passed health care bill has just imposed a new 10 percent “tanning tax,” which makes a certain kind of sense when one considers the long-term health damage that over-exposure to sunlight can produce. But the new law does not actually tax the rays we gather by lying in the sun. Lawmakers have not yet worked up the nerve to do that — though I believe someday they will. For now, the tax just applies to indoor tanning services. But it applies only to some of these services, delivered by only some providers, and only when the services are billed in certain ways.
Services performed by a medical professional are not subject to the tax. Neither are services performed in a fitness center where the tanning service is included in a general membership fee and is not billed separately. (But the IRS says it is not going to allow tanning salons that install workout equipment to reclassify themselves as fitness centers to avoid the levy. I suppose IRS personnel must know something about fitness centers, since they have to keep in good enough shape to schlep the Internal Revenue Code and its many volumes of regulations.)
More logically, spray tans and tanning lotions are also exempt.
Some tanning salons are simply paying the tax themselves rather than try to explain it to customers. But many tanning businesses aren’t in a financial position to do so.
Tanning salons are mainly mom-and-pop businesses. "Just a couple hundred dollars makes the difference in making it and breaking it," Albert Nunes, owner of Bahama Tan in Lakeland, Fla., told a local newspaper.
Despite the exception for tanning provided by a medical professional, the tax could have unintended consequences for those who use tanning beds to treat medical conditions. Many, such as those who suffer from psoriasis, don’t need to go to a doctor. Tanning salons have been cheaper and more convenient. People who need the service are simply going to pay more for it.
Such presumably unintended tax consequences have happened in the past, such as when a federal tax on luxury cars inadvertently penalized handicapped drivers whose modified vehicles were more expensive than the average family sedan. Congress passed the tax in 1991 but authorized refunds to handicapped car owners in 1994.
Some doctors recommend careful, moderate use of tanning beds for individuals diagnosed with Seasonal Affective Disorder, formerly known as the winter blues. Other experts doubt there is any benefit from ultraviolet therapy for SAD. One thing is certain: People are going to be made even sadder by having to pay a new 10 percent tax on therapy from a tanning salon, or, if the salons go out of business, by having to get the tanning treatment from a medical professional at a still higher price, which medical insurance may not cover.
It’s not very surprising that this tax comes with a host of messy repercussions. Unlike the steep taxes many states have imposed on tobacco products, the tanning tax was not primarily intended to improve public health. The House Ways and Means Committee did not review any scientific study of the health effects of artificial tanning. (The risks of ultraviolet radiation are well documented, while the alleged benefits of tanning are subject to debate.)
The tanning tax was just a money-raiser that congressional backers latched onto in order to hold down the health care reform’s price tag. It replaced an equally poorly conceived excise on cosmetic surgery, widely known as the Botax. The Botax was ridiculed in many quarters, including this one; the tanning tax has been slightly better received because of the known hazards of ultraviolet radiation. But it still was poorly thought out.
That, of course, is a feature of the health care overhaul as a whole. It promises to accomplish, a few years from now, the main thing its backers want, which is to provide insurance coverage to most Americans. But the vehicle to get us there is a Rube Goldberg assemblage of gimmicks like the tanning tax that understate, hide and shift the true costs of health care while doing little to keep a lid on overall medical spending.
So get ready for a lot of other unpleasant surprises as the health care overhaul takes hold. The side effects of the tanning tax are not going to be the last we will suffer from this congressional prescription, nor will they be the worst.
Posted by Larry M. Elkin, CPA, CFP®
Ultraviolet light does not do anyone’s skin any favors, even when it imparts an attractive tan. And skin does not care whether light of a particular wavelength comes from a nearby star or from a fluorescent tube.
But the Internal Revenue Service cares. Since July 1, the IRS has cared a lot.
The recently passed health care bill has just imposed a new 10 percent “tanning tax,” which makes a certain kind of sense when one considers the long-term health damage that over-exposure to sunlight can produce. But the new law does not actually tax the rays we gather by lying in the sun. Lawmakers have not yet worked up the nerve to do that — though I believe someday they will. For now, the tax just applies to indoor tanning services. But it applies only to some of these services, delivered by only some providers, and only when the services are billed in certain ways.
Services performed by a medical professional are not subject to the tax. Neither are services performed in a fitness center where the tanning service is included in a general membership fee and is not billed separately. (But the IRS says it is not going to allow tanning salons that install workout equipment to reclassify themselves as fitness centers to avoid the levy. I suppose IRS personnel must know something about fitness centers, since they have to keep in good enough shape to schlep the Internal Revenue Code and its many volumes of regulations.)
More logically, spray tans and tanning lotions are also exempt.
Some tanning salons are simply paying the tax themselves rather than try to explain it to customers. But many tanning businesses aren’t in a financial position to do so.
Tanning salons are mainly mom-and-pop businesses. "Just a couple hundred dollars makes the difference in making it and breaking it," Albert Nunes, owner of Bahama Tan in Lakeland, Fla., told a local newspaper.
Despite the exception for tanning provided by a medical professional, the tax could have unintended consequences for those who use tanning beds to treat medical conditions. Many, such as those who suffer from psoriasis, don’t need to go to a doctor. Tanning salons have been cheaper and more convenient. People who need the service are simply going to pay more for it.
Such presumably unintended tax consequences have happened in the past, such as when a federal tax on luxury cars inadvertently penalized handicapped drivers whose modified vehicles were more expensive than the average family sedan. Congress passed the tax in 1991 but authorized refunds to handicapped car owners in 1994.
Some doctors recommend careful, moderate use of tanning beds for individuals diagnosed with Seasonal Affective Disorder, formerly known as the winter blues. Other experts doubt there is any benefit from ultraviolet therapy for SAD. One thing is certain: People are going to be made even sadder by having to pay a new 10 percent tax on therapy from a tanning salon, or, if the salons go out of business, by having to get the tanning treatment from a medical professional at a still higher price, which medical insurance may not cover.
It’s not very surprising that this tax comes with a host of messy repercussions. Unlike the steep taxes many states have imposed on tobacco products, the tanning tax was not primarily intended to improve public health. The House Ways and Means Committee did not review any scientific study of the health effects of artificial tanning. (The risks of ultraviolet radiation are well documented, while the alleged benefits of tanning are subject to debate.)
The tanning tax was just a money-raiser that congressional backers latched onto in order to hold down the health care reform’s price tag. It replaced an equally poorly conceived excise on cosmetic surgery, widely known as the Botax. The Botax was ridiculed in many quarters, including this one; the tanning tax has been slightly better received because of the known hazards of ultraviolet radiation. But it still was poorly thought out.
That, of course, is a feature of the health care overhaul as a whole. It promises to accomplish, a few years from now, the main thing its backers want, which is to provide insurance coverage to most Americans. But the vehicle to get us there is a Rube Goldberg assemblage of gimmicks like the tanning tax that understate, hide and shift the true costs of health care while doing little to keep a lid on overall medical spending.
So get ready for a lot of other unpleasant surprises as the health care overhaul takes hold. The side effects of the tanning tax are not going to be the last we will suffer from this congressional prescription, nor will they be the worst.
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