Tanning Salon Patrons Face 10% Tax Today

(Corrects location of International Smart Tan Network in third paragraph.)

The price of looking good increases by 10 percent today when a tax on indoor tanning created by the U.S. health-care reform bill takes effect.

The tax is expected to raise $2.7 billion over 10 years, according to a March 10 estimate by the Joint Committee on Taxation, and will help pay for the estimated $940 billion overhaul of health care.

Small-business owners will be hurt by the tax, said Joseph Levy, vice president of International Smart Tan Network, whose Jackson, Michigan-based group represents more than 3,000 members. Women own 67 percent of the more than 20,000 tanning salons in the U.S., he said.

“It’s an expensive change at a time when small businesses don’t have the money,” Levy said. The average monthly cost of an unlimited tanning package is likely to rise to $55 from $50, he said.

Douglas Rassmussen, who owns Absolute Tan in Omaha, Nebraska, said his typical customer is a woman in her forties who attends the salon two to three times a week.

“My customers think the tax is ridiculous,” Rassmussen said. “I think it’s going to scare people away.”

At Beach Bum Tanning & Airbrush Salon in New York, the most popular tanning package for unlimited access to the beds is $109.90 a month, up from $99 because of the tax, said Jah Muhammad, a sales associate.

The industry employs about 140,000 people, said John Overstreet, executive director of the Washington-based Indoor Tanning Association, which lobbies for salons and equipment manufacturers.

Centers Exempt

Fitness centers that offer tanning beds as an incidental service are exempt from the tax as are those who use spray-on services or lotions, according to the Internal Revenue Service.

Tanning-bed use may contribute to skin cancers such as melanoma, said Darrick Antell, a New York-based plastic surgeon who has treated skin cancer.

“Data from the Centers for Disease Control show that for every 10 percent price increase, cigarette consumption drops by 3 percent to 4 percent among adults and 6 percent to 8 percent among young people,” said Perry Robins, a physician and president the Skin Cancer Foundation, based in New York. “We hope this tax will have the same effect on tanning-bed use.”

Dermatologists who use ultraviolet rays similar to those in tanning beds to treat skin conditions also are exempt from the tax, the IRS said.

To contact the reporter on this story: Ashley Lutz in New York at alutz@bloomberg.net.

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