Why ObamaCare's Tanning Tax Matters

The Washington Post's Sarah Kliff was one of just a dozen or so people to attend a hearing on ObamaCare's new tax on indoor tanning salons. From her dispatch:

Regulation may be mind-numbingly boring, but it matters, a lot. Take the tanning regulation: The law imposes a tax on “any indoor tanning services equal to 10 percent of the amount paid.” But that actually raises a lot of questions: What about places that offer tanning without a specific fee, like a gym? As I learned at today’s hearing, gyms, salons, video stores, even laundromats now offer tanning services as a sort of bonus perk to draw in customers, often without charge.

The IRS had to address this question. In a preliminary regulation, it decided that places that include tanning, but without a specific price, are not subject to the new tax. That has indoor tanning salons furious; it was unfair, they argued, to tax one provider of tanning services but not the other.

“People in the industry are asking why a video store bundles five video rentals with a free tan, they don’t have to pay the tax,” Quinn [of tanning chain TanPro] said during his testimony, urging a change in the final regulation. “This just defies logic.”

In the grand scheme of things, the tanning tax regulation is a few pages in the hundreds of thousands that will ultimately be written for the Affordable Care Act. But if you’re a tanning salon, it matters a lot — much more than any of the politics surrounding Romneycare or news conferences on repealing the law.

There are a couple of points you can draw from this. One is how arbitrary this sort of tax, which is really designed to serve a regulatory function (discouraging indoor tanning), usually is. Why does the tax apply only to tanning salons and not to gyms that also have tanning beds? Because that's how IRS officials decided to interpret a law that was probably written by people who weren't thinking much about the distinction at all. Now that tax will end up driving industry-specific lobbying, with tanning salons fighting gyms and video stores over whether or not to rewrite the law. In the meantime, it will probably reshape the indoor tanning market by giving an advantage to businesses that offer tanning as a bundled service.

A related point is that legislators often seem to be under the impression that they can force whatever outcomes they want just by telling someone to draw up legislation saying it must be so—and then, more often than not, bragging that they've accomplished whatever it is they wanted to do. But they tend to ignore the question of how, exactly, those regulations will be implemented and enforced. That's how you end up with, say, rules ordering health insurers not to turn down children with preexisting conditions that result in insurers taking child-only health insurance policies off the market entirely. The details, however uninteresting, are what matter. Regulation isn't an outcome; it's a process. 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    a law that was probably written by people who weren't thinking much about the distinction at all.

    I am absolutely certain the 99%-ers will be outraged when they hear about this.

  • Snooki||

    I didn't go to college. I was living at home, tanning, partying, and screwing anything with a penis. Then MTV put me on a show. Now everyone hates me. Even the US government. I am the 99%.

  • The Situation||

    Abercrombie and Fitch pay me millions not to wear their clothes. I am the 99%.

  • Wealthy Video Store Owner||

    I rent VHS tapes and give away tans with every fifth rental. I am rolling in it right now.

  • ||

    As much as I dislike her philosophy and find her prose lousy and her novels boring, I think Rand pretty much covered this.

  • John Tagliaferro||

    I am waiting for The View vs. FOX debate:

    "It is an attack on young white women!"
    "No! It is a blatant racist attack on People of Color™, making white girls whiter and lowering their cancer rates!"

    Looking forward to the Hank Williams, Jr. song.

  • rather ||

    "That's how you end up with, say, rules ordering health insurers not to turn down children with preexisting conditions that result in insurers taking child-only health insurance policies off the market entirely"

    So business admit that they cannot make money treating the sick, then, what is the point of insurance?

    Another argument for universal care

  • ||

    No dipshit. They don't make money insuring people when the people are free to buy the insurance after they get sick.

  • John Tagliaferro||

    Don't tell him that you can't buy collision insurance for an already totaled car. It will destroy his worldview.

  • #||

    no dumbass. They previously offered them prior to the law. They can make money fine off of young children. What they cant do is make money off of government forcing them to pay for people who didnt already buy insurance.

  • fish||

    In keeping with the tenor of the previous two responses.

    No fuckwit....it's really an argument for single payer tanning.

  • The Fonz||

    Heyyyyyyyyyyyyyyyyyy

  • Apologetic California||

    No you goddamn cunt.
    (Insert reason why rather is a god damn cunt)

  • Pip||

    I submit taht it is because god has damned her cunt.

  • ||

    While not quite rising to an "lol" level, this definitely got a chuckle

  • CrackertyAssCracker||

    Business was making money providing insurance for children. Then that business was made illegal, so those kids don't get insurance any more.

    Argument against ObamneyCare.

  • Warty||

    That's the spirit, guys. Ignore or insult the stupid whore.

  • ||

    Would you say that 99% of reason commenters find rectal to be a useless piece of shit?

    WE ARE THE 99%

  • Warty||

    I am a manic depressive fat chick who owns a thesaurus and has an inexplicably high self-esteem.

    I AM THE 99%

  • ||

    Don't forget the acne, the halitosis, and the yeast infections.

    YOU ARE THE 99%

  • Warty||

    99% of the hits to my blog are me refreshing the page.

    I AM THE 99%

  • ||

    The other 1% are search engine bots, yet I post referrer counts as if that means shit, because I am a technically illiterate moron and don't realize how stupid I look because I'm a technically illiterate moron.

    I AM THE 99%

  • Warty||

    I'm a stupid moron with an ugly face and big butt and my butt smells and I like to kiss my own butt.

    I AM THE 99%

  • ||

  • ||

    Aw! Did you sew that yourself, rather?

  • ||

    YOU ARE 99% THERE

    It's just missing the ankle tracker that is part of her halfway house release agreement from the institute.

  • pmains||

    She ate the 99%.

  • ||

    I was in Philadelphia last weekend staying in center city. The 99%ers were all over city hall. So my wife and I are walking down Market street to go to Independence Hall and here come all these clowns shouting "we are the 99%". First they disrupted this huge Indian wedding. There was a huge group of people welcoming the groom who was arriving at the hotel by horse carriage. They were doing this huge dance routine on the sidewalk and street. It was like a real life Bollywood. So here come the 99% clowns screaming and marching and ruining the whole thing. I wish someone in the Indian wedding would have busted a few heads.

    So as they walked by chanting, I couldn't resist and yelled "fuck off slavers" at the top of my lungs. My wife was horrified. But none of them got it. I think they thought I was talking about corporations instead of them. No kidding.

  • Warty||

    Too bad they weren't Sikhs. One of them might have stabbed a few with his dagger.

  • ||

    Yeah, the Sikhs would have kicked their ass. It would have been epic.

  • EDG reppin' LBC||

    If you just have to see Independence Hall, but can't stand Philadelphia and especially Philadelphians, try Independence Hall in Buena Park, CA. It's a 1:1 scale recreation, and it's pretty cool. Plus, there are lots of chickens and ducks on the grounds.

  • MJ||

    Southern California and Californians? That's your better option?

  • ||

  • ||

    insurance != health care.

    you have to be an idiot to confuse the two

  • ||

    Idiots are the 99%

  • romulus augustus||

    Charge $25 for bottle of water and 15 minutes of music, plus free tanning session.

  • Lord Humungus||

    exactly - the "Musicatannorium" - now with free tanning!

  • Trespassers W||

    $25 cup of coffee + free tan. Call it the "Black and Tan".

  • ||

    The Irish mostly just burn. But I suppose even they would want some color.

  • Trespassers W||

    The Tan & Wash may finally become a viable business model.

  • Eric F.||

    Or you can refer to them as "enclosed, lit horizontal reading booths". Renting for $20 per 8 minutes. Read fast.

  • sarcasmic||

    But they tend to ignore the question of how, exactly, those regulations will be implemented and enforced.

    All they see is intentions. Results don't matter.

  • ||

    As long as the unintended consequences don't interfere with the opportunities for graft, why should politicians care?

  • sarcasmic||

    I think most of them do mean well.
    It's just that they're criminally stupid and arrogant for believing that they can give people the right to health care, or some other bullshit like that.

    The ancient Greeks considered hubris to be a crime worthy of death.

    I wouldn't mind executing some of these politicians if that's what it took to stop them from trying to engineer society.

  • ||

    They have been told their whole life how smart they are. They have no idea what they don't know or just how stupid they actually are.

  • Sugarfree||

    I sunburned my penis

  • Eric F.||

    Yeah, I noticed. That was gross. You are lucky I was drunk.

  • Lord Humungus||

    always use plenty of lotion.

  • Suki||

    Does every thread have to come back to Lotion Man?

  • ||

    Speaking of taxes.

    Funny thing is, it turns out Buffett was being… shall we say… disingenuous when he claimed his “leaders” never got around to asking for his “shared sacrifice.” His company, Berkshire Hathaway, has been fighting the IRS tooth and nail to avoid paying its federal tax bill for nearly a decade.

    How much of the State’s rightful money has this hypocrite been clutching in a white-knuckled death grip? Oh, only about a billion dollars or so. Bill Wilson of Americans for Limited Government tallies up the bill:

    Using only publicly-available documents, a certified public accountant (CPA) detailed Berkshire Hathaway’s tax problems to ALG researcher Richard McCarty. Now, the American people have a better idea of how much in back taxes the company could owe Uncle Sam.

    According to page 56 of the company report, “At December 31, 2010… net unrecognized tax benefits were $1,005 million”, or about $1 billion. McCarty explained, “Unrecognized tax benefits represent the company’s potential future obligation to the IRS and other taxing authorities. They have to be recorded in the company’s financial statements.”

    He added, “The notation means that Berkshire Hathaway’s own auditors have probably said that $1 billion is more likely than not owed to the government.”

    On top of this tax bill, figure the value of the time IRS agents have invested trying to collect it – they don’t work cheap, and we pay their salaries – and the resources Buffett’s people have invested fighting back. All of which would have been saved if Buffett simply practiced what he preached, and willingly handed over his fortune to the brilliant and compassionate “leaders” he commands the rest of us to support without resistance.

    http://www.humanevents.com/article.php?id=45889

  • ||

    Too bad THAT will never be reported and covered ad nauseum the way his "fair share" tripe was.

  • Hugh Akston||

    Gotta say, Suderman, that alt-text was waaaaaaaay better when you used it on Boehner.

  • Peter Suderman||

    Happy to take suggestions for fresh, new tanning-related puns to use in alt-text.

  • ||

    Serutan. That's natures spelled backwards.

  • Fist of Etiquette||

    Tans for the mammaries.

    Don't it make your browned skin blue?

    They excise your tan so they don't have to excise your melanoma.

  • ||

    Oh, tanningbalm.

  • Bee Tagger||

    For their website: The Tanned eMan can.

  • Fire Tiger||

    Taxes - Their TanTastic

  • ||

    And if they use the no-bake spray tan booth, which doesn't have the cancer risk of the fake-'n'-bake tanning beds, the customers pay the same tax. Even though they're not doing anything that's any riskier than say, dyeing their hair or wearing makeup.

    Why don't we tax brown people just for being naturally tan, too? The Obamas can be the first to pay.

  • Tanning Expert||

    The 10% federal excise tax on indoor tanning is actually only for UV tanning services that fall between a specific spectrum of light. Spray tanning (as well as red light therapy and other spectrums of light that don't tan you) is not subject to the tax.

  • Root Beer Flote||

    Well why should my tax dollars pay for your skin cancer? It seems fair that people who will probably get skin cancer pay for the treatment.

  • Hugh Akston||

    Good point, lets stop using tax dollars to pay for peoples' medical care.

  • #||

    or you could just stop using tax dollars to pay for everyones healthcare.

  • Fair Share||

    It seems fair

    Is it their fair share?

  • rattlegoat||

    So you think it is fair to pay for the tanner's annual depression treatments and other problems caused by lack of sunlight?
    Some people tan in parts of the US to avoid problems from not seeing the sun for several months. They use the tanning machines. I used to live in a place where the sun would only be up during business hours or less for a couple of months a year, and most of the time it was overcast. So a lot of people used tanning beds to help cope with their winter depression, not just for fun. And not just whites, brown people from more southern climates also found them useful to cope with winter.
    So if we must cost-justify skin cancer versus seasonal depression, I think over time you would probably see, and least in the northern part of the US, tanning beds costing less than skin cancer. (Depending, of course, how progressed the skin cancer is and how much outdoor tanning the people do during the summer)...just a thought, Mr. Root Beer...

  • Root Beer Flote||

    I don't want my tax dollars paying for someone else's skin cancer or their annual depression treatments. If people want to use tan machines they should pay for them. If that means they pay more in taxes oh well it's their choice. Another thought, Mr. Rattlegoat!

  • ||

    JFC. Is someone forcing you to live in the North? You are physically bolted to the ground and cannot leave?

    If you choose to live in a place where you don't see the sun for months at a time, and you're a delicate hothouse flower who is saddened by the lack of sunlight, who, again, is responsible for your tanning bed and/or depression treatments? That's right.

  • Spencer||

    Look,

    Tanning in- at it's core- racist. Non-white people never benefit from tanning nearly as much as the racists for whom this business is targeted.

  • ||

    Regulation isn't an outcome; it's a process.

    Process? MIC CHECK! MIC CHECK!

  • ||

    the State’s rightful money

    GRRRRRFLSPLZTKF!

  • ||

    [L]egislators often seem to be under the impression that they can force whatever outcomes they want just by telling someone to draw up legislation saying it must be so...

    I'm more cynical. This is all about giving people the impression of having done something about a pressing problem. This is the difference between politics and governance.

  • Libertarians love Regulation||

    Libertarians love regulation when they can profit from it.

    Regulating the surface of the earth with lines and boundaries, with a Land enTitlement program for the privileged, is their favorite regulation.

    Libertarians hate all other regulation. Because they're principled.

  • Warty||

    Still at this, rectal, you dumb whore?

  • ||

    Don't feed it. Just stay back. It will usually rampage around and get bored and go back to its lair.

  • Ayn Rand Glad Hand||

    There is a certain type of argument which, in fact, is not an argument, but a means of forestalling debate and extorting an opponent’s agreement with one’s undiscussed notions. It is a method of bypassing logic by means of psychological pressure . . . [It] consists of threatening to impeach an opponent’s character by means of his argument, thus impeaching the argument without debate.

    ~Ayn Rand
    Argument from Intimidation
    http://aynrandlexicon.com/lexi.....ation.html

  • j2||

    a thuggish tactic that was codified by the likes of saul alinsky. *freeze, isolate, ridicule...*

  • ||

    99% PERCENT OF THE TIME

  • rather ||

    I see epi gave you a case of epiranoia with that STD

  • ||

    99% DENIALS

  • Warty||

    99% SPEAK UP YOU DUMB WHORE

  • ||

    99% EXTRA CHROMOSOMES

  • Warty||

    99% BODY FAT

  • ||

    99% HERPES VIRAL LOAD

  • Brandon||

    Isn't this White Indian's signature trope?

  • ||

    WHITE INDIAN 99%* RECTAL

    * 100%

  • rather ||

    Brandon, congrats on your independent thought but epi has a brain ulcer; I never deny who I am...I am not White Indian

    I post under rather, and half of those ain't mine.

  • rectal's papa||

    And if that cart and bull turn over, Papa's gonna buy you a dog named Rover.

  • Mr. FIFY||

    That's White Idiot, not rectal.

  • Libertarians love Regulation||

    Libertarianism is basically government for me, but not for thee.

  • Liberal Feminist||

    Why not? They believe selfishness is a virtue.

  • ||

    99% HAVING CONVERSATIONS WITH YOURSELF TO PRETEND LIKE PEOPLE RESPOND TO YOU WITH ANYTHING BUT RIDICULE

  • Dan Seals||

    And they rage on
    Some how searching for the answers
    In the night like shadow dancers
    Before their time is gone
    They rage on

    ~Dan Seals
    They Rage On
    http://www.youtube.com/watch?v=-dVTW1ZHuNc

  • rather's Papa||

    And if that mockingbird don't sing, Papa's gonna buy you a diamond ring.

  • Brandon||

    Ah, the strawman response to the troll. Classic.

  • Strawman out of Context||

    Libertarian debate tactic #10:

    Toss out accusations of logical fallacies like a boss.

    Fundamentalist debate tactic #10:

    Toss out accusations of "out of context" like a boss.

    Which is more valid?

  • rectal's papa||

    And if that looking glass gets broke, Papa's gonna buy you a billy goat.

  • ||

    Now, Warty, you know good and well that rectal hasn't been able to whore herself out ever since that tractor accident.

  • ||

    I thought it was an artificial insemination machine for cows, not a tractor.

  • Warty||

    All that did was make extra holes. It's quadrupled her income at least.

  • ||

    Because that's how IRS officials decided to interpret a law that was probably written by people who weren't thinking much about the distinction at all.

    FTFY. Fuck, new tax laws suck balls. They're still trying to figure out all the wacky shit and implications of the HIRE act and the IRS is all: maybe we'll issue some guidance at some point and then you can actually plan for the future/make informed decisions/generally engage in economic activity.

  • Warty||

    How does the IRS compare to whatever the evil Canadian tax agency is called? I'm imagining that it manages to be even more evil, yet oddly civil at the same time.

  • Warty||

    I mean the Canuck one is more evil. FUCK YOU, WORD BRAIN.

  • PantsFan||

    Canada Revenue Agency

    The name itself is even evil

  • Warty||

    I bet it hangs out at ponds and poops all over everything. FUCK CANADA

  • ||

    CRA (Canada Revenue Agency). I don't deal with them much but in general it seems less complicated, but approximately as evil. Canada doesn't require citizens to continue to file tax returns after they've broken residency (which in itself could be argued as markedly less evil) so I haven't filed a Canadian return in years.

    The Canadian Finance Minister recently complained about the IRS (specifically the FATCA reporting requirements which is yet another in a long string of new and exciting ways they want to fuck with all things foreign).

  • ||

    That sticks in my CRA.

  • Sudden||

    In the meantime, it will probably reshape the indoor tanning market by giving an advantage to businesses that offer tanning as a bundled service.

    In addition to that, it will likely have the inverse impact that was intended by the social engineers. They wished to discourage tanning. However, as the industry reshapes and more gyms start offering tanning as part of a bundle of services, people who ordinarily wouldn't go for indoor tanning are going to see that their gym rates have been jacked up in order to account for the addition of tanning as part of the gym bundle and figure "what the hell, I'm paying for it, might as well use it."

    RC'z Law strikes again... and again... and again.

    Fucking DC dipshits are clueless.

  • kilroy||

    This article need more inline pictures of tanning beds in use.

    Like this one.

  • kilroy||

  • Mr. FIFY||

    Whoa. I want one'a those.

  • wedt||

    What I don't get is why tanning salons?? over 80% of our healthcare costs as an individual occurs in the last few years of our life. The overwhelming majority of that comes from: 1) propping up people who really should die naturally, but long term care companies and MEdicare bring in big bucks, 2) obesity/poor eating habits, 3) smoking. Skin cancer is no where near a problem in the health care cost issue. Don't get me worng -- I'm not advocating for any reglautions on anything -- feel free to do what you want to yourself. I just don't think those of us who work really hard to take care of ourselves should have to pay for those who don't. but this tanning tax is just another obvious "see what I can do" moment for politicians.

  • BakedPenguin||

    What I don't get is why tanning salons??

    Because 1) they can drape some feely-goody BS around the health issue and 2) it has a small enough pool of victims that they can get away with it without too many voters screaming.

  • Binky||

    places that include tanning, but without a specific price, are not subject to the new tax.

    IANAL, but why don't the salons simply charge "Whatever you desire to pay, between $X and $Y"?

  • The IRS||

    Go ahead. Make my day. You specified the price as "Whatever you desire to pay, between $X and $Y", so I'll take 10% of that.

  • Max||

    Will Obamacare cover fake eyebrows?

  • Max||

    Arf! Arf! Arf!

  • PR||

    Tanning tax, meh. How about weigh-ins for food stamps?

  • jtuf||

    My bedroom has a skylight. Do I have to charge a tanning tax if a man buys me lunch before we end up skimpily clothed there?

  • ||

    Does this remind anyone else of the faux gras ban? Can't the tanning places just sell pens for $40 and give the tan away for free with that purchase?

  • Trespassers W||

    Faux gras isn't nearly as good as the real thing.

  • ||

    I do find a tax on vain white people somewhat amusing.

  • EDG reppin' LBC||

    Does this remind anyone else of the faux gras ban?


    I hate to be picky, but you meant foie gras. And it is delicious too!

  • ||

    Oops, sorry. My wikipedia search to check spelling just forwarded me to a page with faux_gras in the title.

    But you're right.

    Does anyone know if they can give away tans at tanning salons?

  • Tanning Expert||

    The IRS issued regulations that specify if UV tanning is involved, and there is a fee involved in the transaction, the proportinate amount that involves UV tanning's "fair market value" must be taxed 10%. So if you sell a pen and a UV tan for $40, the fair market value of the pen is subtracted from the fair market value of the tan and voila... 10% of that would be owed to the Treasury.

  • ||

    That's the green plastic shit in easter baskets.

  • ||

    So if you run a tanning salon just change your business. Start selling coffe for $20, and throw in a free tan with every cup. Problem solved.
    Well, other than the problem that we have a government full of idiots who;
    A; actually think taxing tanning alons is a good idea. And
    B; are too stupid to see how easy it is to avoid said taxes.

  • Tanning Expert||

    If only it were that simple. If you went simply by the several paragraphs that talk about the 10% tax on indoor tanning written in the Healthcare act, changing your business model would work. But the IRS stepped in prior to the taxes effective date in the summer of 2010 and issued regulations that spell out that if there is any charge whatsoever involved with indoor UV tanning, some of it is going to be liable for this excise tax (which isn't really an excise tax by the true definition of the term). There is no tax if you give away tans and there are no fees collected in any way (either at the time of purchase or in the form of a membership fee). The exceptions to this are if you're a medical facility doing a medical procedure performed by a licensed medical professional (like a dermatoligist charging $100 to use a "phototherapy" booth, which is a cheaper version of the same equipment tanning salons use, to clear up skin conditions such as acne or eczema), or a "Qualified Fitness Facility" that offers tanning for free with it's normal gym rates (in other words, there is one flat rate to use the gym, and tanning is included with no premiums charged). There is actually no exception for video stores that offer UV tanning as is stated in the article.

  • ||

    It's as if the politicians and their rapturous butt-monkeys can't think more than 5 minutes into the future. "Okay, I've passed the tax; done, and done! I can stop thinking about it now."

    The reality that people change their habits in response to taxes seems to completely baffle our "leaders".

  • smartass ||

    One must think before one can be baffled, Mr Baffle-pus.

  • BigT||

    " Now that tax will end up driving industry-specific lobbying, with tanning salons fighting gyms and video stores over whether or not to rewrite the law."

    Regulation begets lobbying. That's like a universal truth.

  • Invisible Finger||

    May the lord hate you and all your kind. May you turn orange in hue, and may your head fall off at an awkward moment.

  • ||

    Several problems here. First of all there are not 25,000 salons left in the US. There has been shrinkage since tanning was at its peak 10 years ago. Then the economy tanked and tanning was struggling everywhere. Then the tan tax came a long and decimated the industry to the point where there is maybe 12,000 salons left, many of which are chain stores. Beauty salons are simply selling their beds because the tax is way too much trouble for the little bit of business that it brings in. I talk to people everyday who are leaving the business. It's sad because this tax has probably cost 50-75,000 jobs in the industry.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement