The time for repealing the Tan Tax could hinge upon the next election, says the Indoor Tanning Association. But do you have what it takes to join the fight?
Enacted on July 1, 2010, the Federal Tan Tax continues to vex tanning salon owners across the country. Operating in a tough economy and also plagued by anti-tanning hype, the last thing any tanning salon operator wants to do is be forced to charge their guests more per session… especially to fund an expensive yet flawed healthcare program that few in this industry supported. With Barack Obama being a lame duck President, the approaching mid-term elections and the Affordable Care Act becoming political Kryptonite for some legislators, now is the time to try to repeal this burdensome tax. The ITA is committed to continuing its fight, and you can help!
Admittedly, this industry’s efforts to repeal the Tan Tax have suffered a blow with the recent events surrounding Rep. Michael Grimm (R-NY). In 2010, he was the first politician to approach our industry with a proposed bill calling for repeal of the Tan Tax. This April, prosecutors released a 20-count indictment against Grimm in relation to business practices in his restaurant, Healthalicious. The 30-page indictment alleges Grimm hired illegal immigrants, paid his staff in cash to avoid payroll taxes and lied about this under oath in a January 2013 lawsuit filed by two former Healthalicious employees.
“While everyone is innocent until proven guilty,” said John Overstreet, ITA Executive Director, “Rep. Grimm will likely be distracted for the rest of the year while he fights to clear his name. This is a shame, because he approached our industry in 2010 with his bill to repeal the Tan Tax, and he’s been one of our most vocal supporters.” Overstreet says he’s optimistic that another Congressional representative will step up to become the tanning industry’s next Tan Tax champion.
No one in our industry understands the political climate in Washington, D.C. better than John Overstreet. The ITA Board hired him as Executive Director in 2001 because of his political experience, and he’s continued to keep his finger on the pulse inside the Beltway ever since. These days, his acute political senses tell him that a unique set of circumstances have placed the tanning industry in a good position to repeal the Tan Tax. After four years of helping to fund Obamacare, this should come as good news to overtaxed tanning salon owners.
“These are exciting times for us!” he said, “Obama has just a little more than two more years left of his term and his influence is decreasing. As a result, the Affordable Care Act continues to be a controversial topic even among some Democrats. There are some Democratic legislators who’ve even gone so far as to say they’d be willing to amend parts of the bill.” Other Democrats, Overstreet says, are continuing to back the President and the ACA, which is why the 2014 mid-term elections are so important to this industry.
“The Republicans will likely continue their control of the House,” Overstreet explained, “so the Senate elections are very important. With one-third of its members up for reelection, it’s extremely important for salon owners to get to know their state Representatives and Senators and brief them on what the indoor tanning industry is all about. The opinions of voters in their districts are the most important things to these politicians.” Some states with incumbent Democratic Senators who are up for reelection include Alaska, Arkansas, Louisiana and Virginia.
There’s another piece to add to the Tan Tax puzzle – it hasn’t been the moneymaker that politicians and government officials thought it would be.
“Since the tax took effect on July 1, 2010,” Overstreet said, “it generated $15 million in its first year. According to the IRS, this increased to $86 million in 2011, and $91 million in 2012.” While these numbers seem high, Overstreet is quick to point out that they fall drastically short of the government’s projected $50 million in the tax’s first year, and $200 million for each of the following years before settling into a $300-million-a-year revenue. This is hardly enough to cover the more than $900 billion needed to operate the Democrats’ ambitious and expansive health insurance program.
The Tan Tax proved to be a near-crippling blow to an already-ailing industry. “The economy wasn’t the best to begin with,” Overstreet said, “so when the government added this tax onto salon owners, who had to pass the costs on to their tanners, many salons saw a decrease in business. Unfortunately for some, this hastened the closing of their salons.” As proof of his claim, he cites IRS figures showing a 13 percent drop in the number of tax forms reported between March 2011 and March 2012. “Salon owners who quit filing returns are those who’ve gone out of business,” he added. “It’s that simple.”
What you as salon owners need to do about this issue is as plain as day – join the ITA. You need to support this organization because it’s the only one protecting everyone’s right to tan. It’s also the only tanning organization with the knowledge, ability and desire to defend your interests at the Federal level. You also need to get involved politically. As a voter, you have more influence with your home state legislators than you might realize; it’s up to you to get to know your representatives and convince them that further legislation and regulation will only harm your livelihood. If you can’t convince them of this, do your part to replace them with someone who can!
To join, contact the ITA today at 703.336.3632, email admin@theita.com or visit theita.com.
