The tanning tax is a ten percent federal excise tax that the U.S. government requires tanning providers to collect on

indoor tanning Indoor tanning involves using a device that emits ultraviolet radiation to produce a cosmetic tan. Typically found in tanning salons, gyms, spas, hotels, and sporting facilities, and less often in private residences, the most common device is a ...

services. Tanning service providers must pay the tax each quarter to the

IRS The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax ...

. The ten percent tax must be collected from the client, according to the IRS, similar to the collection of a sales tax.

History

The tanning tax originates from passage of the Patient Protection and Affordable Care Act, also known as Obamacare. The tax was among 21 new taxes that were included in the law. According to ''

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'', the tax was expected to raise $2.7 billion over the first decade. After five years of the tax going into effect, it raised less than $500 million.

Exclusions

Phototherapy services, which the IRS defines as a "service which exposes an individual to specific wavelengths of light for the treatment of dermatological conditions,

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or other

psychiatric disorder A mental disorder, also referred to as a mental illness or psychiatric disorder, is a behavioral or mental pattern that causes significant distress or impairment of personal functioning. Such features may be persistent, relapsing and remitt ...

neonatal jaundice Neonatal jaundice is a yellowish discoloration of the white part of the eyes and skin in a newborn baby due to high bilirubin levels. Other symptoms may include excess sleepiness or poor feeding. Complications may include seizures, cerebral pal ...

, wound healing, or other medical condition determined by a licensed medical professional to be treatable by exposing the individual to specific

wavelengths In physics, the wavelength is the spatial period of a periodic wave—the distance over which the wave's shape repeats. It is the distance between consecutive corresponding points of the same phase on the wave, such as two adjacent crests, tr ...

of light" are excluded from the tax if they are performed by a licensed medical professional on that professional's premises. If tanning services are provided as part of a gym membership that is considered a "qualified physical fitness facility", the tax is not applicable. Spray tanning services, as well as the purchase of topical creams and lotions, are also excluded from the tax.

Economic effects

According to the American Suntanning Association, almost 10,000 tanning salons have gone out of business since the tax went into effect, resulting in the loss of 81,000 jobs. Prior to passage of the PPACA, over 164,000 people worked in the tanning industry. As of June 2015 that number was 83,000. In

California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...

, the number of tanning salons dropped in half between passage of the PPACA in 2010 and 2015. Business owners say the "little-noticed 10 percent tax on tanning in President

Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the ...

's health care overhaul has crippled the industry," according to the ''Denver Post''. However, experts say the tanning industry is overstating the tax's effects on jobs and business closings, and that other factors such as public health warning against tanning play into the equation.

Legislation

In the

U.S. House The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...

, Congressman

George Holding George Edward Bell Holding (born April 17, 1968) is an American politician, lawyer, and former federal prosecutor who is a former United States Representative for North Carolina's 2nd congressional district from 2017 to 2021. He previously repr ...

of North Carolina introduced a bill on June 9, 2015. H.R. 2698, " The Tanning Tax Repeal Act of 2015" would repeal the ten percent excise tax.

Notes

References