Tanning Tax: Summer Bummer?

Tax News

Aaaah summer’s in the air.  Time to get that sun-kissed skin.  Well not so fast.  Did you know you will pay an additional 10% federal excise tax if you go to a tanning salon to get that extra glow (guess that’s why Snooki said she tans naturally now)?  Michael Rubin gives us the 411 on the Tanning Tax.

What is a tan?

When your skin gets darker.

No, I mean for purposes of the tanning tax, what’s a tax?

The health care reform package created several new taxes, many of which phase in over time. However, the tanning tax became effective immediately, back in 2010.  Here are the answers to some frequently asked questions about the tanning tax.

According to the IRS, a taxable indoor tanning service is a “service employing any electronic product designed to incorporate one or more ultraviolet lamps intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.”

Are there any tans, tanning services, or tanning products which are exempt from the tax?

Phototherapy is exempt from the tax if it is performed by a licensed medical professional.  Phototherapy is done in the treatment of a specific list of diagnoses including seasonal affective disorder, neonatal jaundice, and sleep disorders.  To be exempt from the tanning tax, the phototherapy must be performed at the professional’s office – it can’t be done at your home or any other location.

In addition, there is no tanning tax on spray tans or suntan lotions (but you’ll probably pay your regular state and/or local sales tax on the purchase).

There is some good news. There’s still no tax for tans earned the old-fashioned way–at the beach.  Not yet, anyway.

How much is the tanning tax?

The tanning tax is 10% of the amount charged for the tan.  So if you pay $25 for a tanning service, the tax is 10% of $25, or $2.50.

How do you pay the tanning tax?

Similar to a sales tax, you pay the tax at the time you buy the service.  The tanning tax simply increases the amount you owe for the tan.

What if I wasn’t charged the tanning tax?

It’s possible that the salon owner decided to include the tanning tax in the price you paid for your tan.  Regardless, the tanning tax will be ultimately paid to the IRS by the tanning salon owner; you, as the individual recently bronzed, have no responsibility for this tax after you walk out of the building.

Why is there a tanning tax?

The tanning tax was created for two commonly stated reasons. First, to provide additional revenue to the government for the specific purposes of paying for health care reform. Second, to provide a negative incentive (didn’t burn the “New Jersey Tanning Mom”) for the use of tanning salons, as there have been studies showing their use has long-term harmful health consequences.  Of course, these two goals work against each other somewhat; since the use of tanning has gone down somewhat due its increased cost, the amount of revenue raised for health care reform has fallen quite short of budget estimates.

Will the tanning tax be repealed?

Although there have been efforts to repeal the tax, repeal’s near-term passage is quite unlikely given our divided Congress. Of course, should the U.S. Supreme Court find the Health Care Reform Act unconstitutional, one possibility is that it would throw out the entire law, presumably including the tanning tax.

Happy summer!

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