Tan Tax Worries BusinessesBy Tracy Armbruster
Jul. 02, 2010
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Tan lovers who get their golden glow from a tanning bed will now pay more for that luxury at a salon. There is now a 10-percent tax to use equipment containing at least one U.V. lamp. This is part of the Obama Administration’s health care reform law, which shifts the five-percent tax on Botox and elective cosmetic surgeries to the indoor tanning industry. Doctors who use the lights for medical purposed are exempt from the tax.
But, local salon owners worry about how this new tax will affect their businesses. Brenda Steele, the owner of Pear Orchard Tan and Hair in Ridgeland, says she doesn’t know how this new tan tax will affect her bottom line.
“tax on tanning is outrageous. Some will be forced to close. A lot will lose business and employment will be lost,“ expresses Brenda.
And, she and her husband are having a hard time telling their customers to pay more in a slow economy.
“It’s do you take the 10-percent out of the profit margin or pass it along to your customers,“ asks Scott Steele.
But, it may not stop some customers from tanning indoors.
“People will pay the price for it but it’s ridiculous because we pay enough taxes. I’ll continue to tan and pay the price,“ admits Mollie Cockrell.
Terry Munroe, the owner of Paradise Tan in Clinton, says the tanning industry is doing very well, despite the current economy.
“Some salons say they’re going to absorb it because they’re trying to appeal it before the health care goes into effect,“ adds Munroe.
Munroe doesn’t know how he will pay for it. He can either charge his clients more for the service, or he can take from his profits.
“It’s bad for small business owners. The taxes are going to be 70-percent less than they have anticipated. It’s going to be nowhere near what the Botox industry is generating with that five-percent tax would have done to dermatologists with Botox,“ comments Munroe.
And, he’s hoping that business will pick up soon.
“Don’t worry about it. Keep tanning. We’re taxed enough as it is,“ claims Munroe.
Local salon owners tell us the tanning industry could appeal this tanning tax, possibly on grounds of discrimination.