Back in 2010, the American Affordable Care Act (ACA) was put into play and our industry got smacked with the “Tan Tax” – “switched in” by a last-minute move, replacing taxes on cosmetic surgery and Botox treatments. Great! Defined: “Officially enacted on July 1st of 2010, the tanning tax was implemented as a means to collect revenue for President Obama’s health care reform bill. The Tan Tax is a 10% levy on all indoor tanning services – those individuals who utilize tanning beds or any service related to indoor tanning (including spray tans) are subject to this taxation. When passed, congress claimed the tanning tax will bolster government revenue by nearly $3 billion over the next decade.” It was also positioned that it would drive $1 billion in the first four years. Well, that certainly hasn’t happened – it’s been less than 50% of that number – and clearly, very doubtful that it will be $3 billion in ten. However, let’s look at the effect.
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Some salons, already pinched by negative reporting in the media and health mags (largely supported by skin care and SPF ads) and suffering a declining customer base, took the brunt by simply paying this quarterly tax instead of passing it through to tanners. Yes, it was meant as a deterrent – like the $.60 Big Gulp tax in Philly, charging up to $6 per pack of cigarettes in Chicago, and high liquor taxes – by a government that wants you to live a lifestyle based on reducing healthcare costs. Groups like the American Academy of Family Physicians want the Tan Tax to stay in place, as they think it will equal a decrease in skin cancer. Well, as we all know, there is no regulation on common sense and the public – and children still remain at risk (intentional or not) for overexposure and sunburn at ballparks, pools, beaches and lakes.
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Fast-forward to October 2018. The Save American Workers Act (SAWA), which would reduce taxes levied under the ACA, is under consideration in the U.S. House of Representatives. The bill would repeal or delay several burdensome taxes and regulations implemented under Obamacare. The result? It would save businesses and individuals billions of dollars over the next decade! The Tan Tax is included in this effort. The House voted on September 14 to refer SAWA to the Committee on Ways and Means. A previous version of SAWA passed the House in 2014, but failed in the Senate.
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At the National Tanning Expo, I caught up with Melinda Norton of the American Suntanning Association, who gave an overview of the group’s efforts to get the Tan Tax repealed.
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IST: Melinda, the Tan Tax has been in effect for almost a decade and the ASA has been very involved in trying to get it repealed. What factors affect our chances?
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Norton: A number of factors will impact the success of the repeal – the most important being our federal lobby team that has knocked on doors every day for six years.
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IST: Although meant to be a pass-through tax, what is the reality?
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Norton: Whether or not salon owners have paid the tax themselves or passed it on to consumers, this tax has closed nearly 60% of tanning salons and more than 100,000 women have lost their jobs. Regardless of where a salon is located or its size, no salon has been totally exempt from the impact.
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IST: What will you focus on in 2019?
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Norton: To date, ASA has defeated more than 90 state teen tan-ban legislation attempts and we continue to monitor and fight each and every state battle. Since 2013, we have become more efficient and successful. We absolutely do not want any further restrictions on indoor tanning in any state, and with the help of our members, we will continue to fight against more unfair regulation.
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IST: So, Melinda to wrap up, give me a quick précis overview on the ASA.
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Norton: Our 2019 agenda is exciting! We will continue to have a strong presence in Washington, D.C. to ward off additional regulations and most importantly, continue building relationships with all federal agencies that oversee our industry. Past ASA President Bart Bonn and I have attended over 3,000 meetings in Washington to ensure our position with the federal government is strong and visible. ASA will also move forward with legal action against those who unfairly attack the market. We’ve had significant success in slowing the flow of inaccurate negative publicity. With help from additional salons joining the ASA, our public relations, legal, research, state and federal lobbying efforts will continue to strengthen and be more effective in the future.
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