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Roni Deutch Explains the Tanning Tax

04th August 2010
By Roni Deutch in Taxes
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When President Obama signed the health care reform bill, it signaled the beginning of dozens of tax law changes. Some gradual tax increases are scheduled over the next few years, while others took affect immediately. To help those looking for more information on the new tanning, I have put together the following explanation of the tax and the accompanying IRS regulations.

Purpose of the Tax

Starting July 1, 2010 a 10% tax will be levied on indoor tanning salon services. Similarly to sales taxes, the tax will be collected by the business and forwarded to the federal government. The purpose of the tax is to raise money to fund health care reform; the tanning tax replaced a cosmetic surgery tax that was unwelcome by the American public.

A Sin Tax?

The American Academy of Dermatology Association (AADA) actually pitched the idea to Senate members as a way to discourage indoor tanning among the public. As such, many experts refer to the tanning tax as a sin tax, which is a type of tax that discourages certain behaviors among taxpayers. Taxes on cigarettes and alcohol are both common examples of sin taxes. Because of the heighten risk of getting skin cancer, Congress was quick to approve the tanning tax.

Health Concerns

Study after study has reaffirmed the connection between frequent sun exposure and tanning with an increased risk of skin cancer. In addition to being a source of revenue, the government is hoping this will lead to fewer cases of melanoma, which is the most deadly of skin cancers. In fact, other states and local government agencies are also implementing restrictions on tanning for the same reason. New York is even considering an age limit on tanning salons that would require visitors to be at least 18 years old.

Consumer Expense

Many Americans consider a trip to the tanning salon a part of their regular routine, similarly to getting acrylic nails filled or a hair trim. A 10% price increase might not seem like that big of a deal to most Americans, but for consumers who visit the salon on a weekly basis, the tax will result in them paying a significant amount of money to the government.

Popular reality television show star Snooki spoke out against the new tax in the "Jersey Shore" preview, where she announced that she would no longer go tanning due to the tax. She even added, "McCain would never put a 10% tax on tanning." However, critics were quick to point out that the tax had not yet been implemented when filming took pace. However, Senator John McCain did reply to Snooki by posting a message on his Twitter profile saying "u r right, I would never tax your tanning bed! Pres Obama's tax/spend policy is quite The Situation. but I do rec wearing sunscreen!"

Cost to Some Small Businesses

Since a majority of the nation's tanning salons are individually owned and operated, many owners are calling the tax an attack on small businesses. They have even warned that the additional tax will lead to a direct loss of revenue and job losses. With all the attention the tanning tax has received in the media, salon owners are already running discounts and promotions to entice customers. In addition to getting customers in the door, these salons are also worried about following the complicated new tax guidelines.

The Tax Lady Roni Deutch and her law firm Roni Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax lawyers who can fight IRS tax liens on your behalf.
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