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Area tanning salons bracing for impact of new tax

Posted Monday, Apr. 05, 2010  comments  Print Reprints
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The cost of keeping that golden tan year-round is going up this summer.

Starting July 1, a small provision in the huge national healthcare law will impose the first ever U.S. tax, of 10 percent, on indoor tanning.

"This is frustrating for small-business owners in general," said Renee Armstrong, owner of Great Tans salons in Benbrook and Fort Worth. "Taxes already seem to go up yearly, and this makes it more and more difficult for us.

"This is something that has never been charged before," she said. "We'll have to do something to compensate for most clients."

The tax is expected to generate $2.7 billion over the next decade to help fund the $940 billion overhaul of the nation's healthcare system.

But tanning salons locally and nationwide said the tax won't raise that much money and could sway people to give up tanning altogether, putting businesses at risk of not surviving.

"That is grossly out of proportion to what people in the industry think it will raise," said John Overstreet, executive director of the Washington, D.C.-based Indoor Tanning Association. "People in the industry think it might raise maybe half of that, but no one knows.

"You betcha it will hurt the industry," he said. "These are small businesses ... and they don't make a lot of money to begin with."

'Blindly down the path'

The tax, which will be charged on services provided by electronic tanning products that use ultraviolent lamps, wasn't originally in the bill. Tanning industry officials say it's the result of a late change before the Senate voted last year.

Initially, the bill included a 5 percent tax on elective cosmetic medical procedures, such as Botox injections and breast enlargements, resulting in the nickname "botax."

But medical lobby groups such as the American Society of Plastic Surgeons, the American Medical Association and Allergan, the maker of Botox, got involved in the discussion, and ultimately that tax was removed and the tanning tax put in.

"This is just not the way we should be making tax policy," Overstreet said. "This obviously caught us by surprise. ... They didn't study the industry; they didn't look at it. They went blindly down the path."

Groups such as the American Academy of Dermatology lauded the tax, saying indoor tanning is risky.

Overstreet said his association says the tax will affect about 18,000 businesses whose main service is tanning and 10,000 other businesses, such as nail salons, spas, health clubs.

The tax could cost as many as 9,000 jobs and force about 1,000 salons to shut down, some tanning industry estimates show.

"You can't raise the prices by 10 percent and not be impacted," Overstreet said. "If you could, companies would do it all the time."

"People already are worried about groceries. Cutting out luxuries, like getting a suntan, unfortunately comes early."

2 sides to every story

Some local tanning salon workers and owners say they fear that the new tax will hurt their business. Taxes are already charged on products, such as lotions, but not on tanning itself.

"Congress thinks we are a luxury item people can still afford, and they are going to tax us," said Melody Brainin, owner of Tan Lines Etc., which has stores in Roanoke and Keller. "I'm upset that they are coming at us like this, and we are going to have to go back and tax people who already signed up with us."

And with the healthcare law requiring people to buy insurance, some may no longer have enough discretionary income for tanning, Brainin said.

"They may cut tanning out all together," she said. "I understand where the [tax] money is going to go, but there are two sides to every story."

Right now, no one knows how the tax will affect local tanning salons. Some say they may not be able to hire part-time help this year or may have to cut back on employees' hours.

And with the legal challenges against the healthcare law filed by Texas and other states, some people aren't sure whether the tanning tax will go into effect July 1 or be delayed if the law is tied up in court.

"We may not know what happens exactly for several years," said Joe Cokel, a Tan Lines employee.

Texas regulations

For Texas tanning salons, the tax comes on the heels of tanning regulations that went into effect this year.

As of Jan. 1, Texans ages 161/2 to 18 must bring in a parental consent slip to use a tanning booth.

Pamela Kelly, an employee at Tan Lines, said that each week she has to tell one or two girls they are too young to tan without parental permission.

"They don't know the law has changed, and we have to send them away," Kelly said.

Brainin said she plans to offer airbrushing memberships to customers younger than the legal age to tan "at a very reasonable price." That way, "they can still get their tan," she said.

Exceptions

Not all tanning businesses are being hit by the tax.

The Salas Sunless Airbrush Tanning in Colleyville, for instance, doesn't have tanning beds or machines that spray people, said Frank Salas, the owner.

Salas has employees who airbrush tans on customers in 15 minutes, customizing tan shades to eye and hair color and skin tones. He said the tans last as long as 10 days and cost $60, for one application, to $120, for a month's worth.

"People don't pay taxes on the spraying right now, and we'll still have no taxes," Salas said. "I think the government is looking to get money, and obviously this is an industry they looked at.

"They tax alcohol and cigarettes, so why not tax tanning?"

ANNA M. TINSLEY, 817-390-7610

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