Here Comes the Sun-Tan Tax

I love the sun and think modern sunscreen is just about one of the most fabulous inventions of the last 20 years. I'm a high SPF kind of girl who loves the outdoors but wears a hat and couldn't really get tan if I tried.


I've never tried a tanning salon, but those services are provided by thousands of small businesses across the United States. Unfortunately for them and their fans, their getting hit with a sizable tax.


To help fund the recent $940 billion health care reform plan, a 10 percent tax on individuals receiving indoor tanning services was included in the bill. The initiative is expected to generate $2.7 billion over 10 years.


The IRS last week issued regulations outlining the administration of the 10 percent tax on indoor tanning services that becomes effective July 1.


The agency says providers of indoor tanning services will collect the tax when the purchaser pays for the tanning services.


The tanning salon is expected to pay over these amount to the government quarterly, along with IRS form 720, known as the Quarterly Federal Excise Tax Return.

The tanning tax will apply to electronic products designed for tanning that use one or more ultraviolet lamps with wavelengths between 200 and 400 nanometers. Spray tans and tanning lotions will not be taxed.

"This is going to close tanning salons," Joseph Levy, vice president of the International Smart Tan Network, which has 3,000 member salons, told CNN Money. "You can't just pass on a tax like this to customers and not have it hurt your bottom line."


The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises, says the IRS. Those kind of services are often used by dermatologists for various skin conditions. The agency added that the regulations also provide an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee.

The IRS and Treasury Department invite comments.