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Health care bill burns local tanning industry

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The tanning salon industry took a big hit when the health care reform bill championed by President Barack Obama was passed this week.

Included in that bill is a 10-percent tax on tanning-salon sessions that salon operators and makers of  tanning products think could cause the loss of thousands of jobs nationwide.

The impact is likely going to be felt even harder in central Indiana, where dozens of tanning salons have popped up over the last two decades and where one of the nation’s largest makers of tanning beds and lotions made especially for tanning salons is headquartered.

The so-called tanning tax caught many in the industry by surprise.

“That whole tan tax thing was a fluke of a deal,” said Bill Pipp, CEO of Indianapolis-based ETS LLC, ranked by several industry groups as the top-selling manufacturer of tanning beds and lotions. “It was going to be a 5-percent tanning tax and another 5-percent on cosmetic surgery.”

But lobbyists for the American Medical Association and American Academy of Dermatology successfully lobbied to have the tax on cosmetic procedures, such as Botox treatments, facials and lifts, removed from the bill at the eleventh hour. And the tanning tax was doubled to 10 percent, Pipp said.

“It’s difficult to say how badly this will hurt the tanning industry, but it’s safe to say it will hurt,” Pipp said. “Anything that charges your customers something and delivers no additional value is going to hurt your business.”

The tanning tax takes effect July 1 and will apply to electronic products designed for tanning that use one or more ultraviolet lamps with wavelengths between 200 and 400 nanometers.

Rick Kueber, founder and CEO of Sun Tan City, which has 16 central Indiana locations, said the impact is already being felt.

“My customers are starting to become aware of this and are asking about it,” he said. “This will have a negative impact on everyone in the industry.”

Indoor tanning prices vary, but most require a monthly membership charge in the $20 to $30 range with an additional $3 to $10 per-session charge.

Kueber thinks central Indiana will be hit especially hard. He said tanning salons have become popular in the Midwest and northern states due to its climate.

“The impact here will be far greater than almost anywhere not only due to the number of salons, but because ETS is located here and they’re an industry leader in manufacturing both tanning beds and lotion,” he said.

Industry sources estimate that there are more than 1,000 people working in the tanning industry in central Indiana alone. There are 200 working in Indianapolis for ETS, Pipp said.

Kueber predicts the number of local jobs in the industry will decline as a result of the tax.

“The mom and pops will be hurt worse, with some likely going out of business,” Kueber said. “The impact will run right on up the line to the manufacturers. This measure is definitely going to cost some jobs.”

Industry sources estimate that indoor tanning has mushroomed into a $6 billion annual industry in recent years. Authors of the health care bill estimate the new tanning tax will raise $2.7 billion over the next 10 years.

Tanning industry officials, Pipp said, have been given no reason by legislators why this tax was tied into the bill. Presumably, its because many health care authorities— including the World Health Organization and American Cancer Society—consider tanning a significant cancer hazard.

“I’m not sure why they did this," Pip said. "This tax will be passed on to everyday people, while people who opt for high-end cosmetic surgery get a pass.”

Pipp scoffed at the notion that the tanning tax is a sin tax comparable to taxes on tobacco and alcohol.

“We know smoking causes cancer,” Pipp said. “There’s still a lot of science that says there’s no concrete evidence that tanning, when done properly, causes any harm.

“If tanning is harmful, shouldn’t we shut down all city-run swimming pools and the public beaches in Florida and shouldn’t we require everyone on a golf course to wear hats and sun screen.”

Pipp also points out that the tanning industry is regulated by the Food and Drug Administration, and recent studies show sun exposure promotes production of Vitamin D in the body, which is good for people. The FDA regulates tanning beds as medical devices, setting limits on how often a person can use a bed, for how long and which light bulbs can be used, Pipp said.

Kueber said this tax represents a broken promise by Obama.

“Let’s call this what it is,” Kueber said. “It’s a tax on working, white women. That’s 80 percent of our client base. President Obama pledged he wouldn’t raise taxes on the middle class, and with this, that’s what he’d done. That’s disappointing."

ETS may get a back-handed benefit from the tax.

ETS also manufactures a growing line of ultraviolet-light-free spray-tan booths and hand-applied tanning sprays, and those items are unaffected by the new tax. Some tanners may flee convential tanning methods for the newer ones to avoid the tax.

“The spray booths are one of the fastest growing parts of our industry,” Pipp said. “And this will certainly raise the awareness of sunless spray-on tanning. Still, this tax is nothing the industry would ever wish on itself.”
 

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  • ??
    You have NO idea what you are talking about so before you wanna put your two cents in, reasearch your answers. Fast food is bad for you, tanning outdoors is bad for you, BOTOX is not healthy. There are various other things out here that are worse than tanning in moderation at a salon. GOtta loveeee people like you!
  • @ boo hoo
    "People that go to pools, beaches, golf courses, etc. do not necessarily do so to get a tan and can take steps to prevent that from happening (e.g. apply SPF 50)." And those people ALWAYS apply Correctly their SPF. And CERTAINLY NO one going to a pool or beach is in search of tan. You are kidding me right?
  • Gov't sticks us again
    I don't go to tanning beds nor will I, but don't get lost in what's going on. This is just another tactic for the current administration to gain more revenue on the backs of another sector of our society.
  • Obama - What a broken promise??
    How can this be? The little "messiah" broke a promise not to tax middle America. Surely you jest. Surely our little "messiah" would not do such a thing. I am just shocked. Totally speechless.
  • Get over yourselves
    "Tax on white women..." What a crock. I am a white woman who will be completely unaffected by this tax, because I do not use a tanning booth. Please don't use alarmist tactics to whip up support. Face it--you are in an unhealthy business.

    Yes, it is a fundraising measure. But tanning isn't being outlawed; it's just being taxed. If your patronage goes down, find a more sustainable industry. Or--better--redefine the industry you're in so that you make money despite the turn of the tide. Buggy-whip manufacturers decried the advent of the automobile; the successful ones looked for opportunity in the new technology. If your chosen industry is so rocky that a tax ruins your business, then it's no industry--it's a fad.
    • Fat Tax
      Why not put a 10% tax on any food item that has a fat content higher than 5 grams...maybe we would have less fat unhealthy people...humn...now that would make sense! But tanning, really?
    • Agreed
      I agree. Right now, both parties are inept. Reading through this new healthcare bill, one thing sticks out. TAXING. This plan taxes everyone, from middle class americans, to insurance companies, to medical device and pharma manufacturing. The most mind-numbing is the way the gov is taxing the insurance carriers though. There is a tax on them by the same percentage that their premiums go up year over year. So, if there is a 5% increase in premium...the gov taxes them an extra 5%. The next year, the insurance company has to build 5% more into the rates to cover the tax...exponentially the rates go up...it's insanity!!
    • For real?
      Come on. Based on that logic we would be taxing Big Macs, lawnmowers, and any other potentially harmful product. They all inconclusively cause health issues. What suprises me is that people are dumb enough to jump on the band wagon and support this stuff when they know it makes no logical sense. This is just a source of revenue, that's why it was 10% versus 5%. Because plastic surgeons have more political weight apparently. Maybe one day people will wake up and start addressing the fact that this healthcare bill does almost nothing to impact the ever increasing costs of medical care. Hopefully by the time the insurance companies are bankrupt from government restriction, or buoyed by the public's money, we might start to look at root problems. Until then, I think I'm done voting. I've had the chance to vote for two Presidents and I've learned that it apparently doesn't matter. Both parties are inept.
      • Cry-Baby, find another Cause
        Gee taxing a cancer causing practice. Well, if you don't like the tax, do it the old fashioned way, sit in the sun. Nobody is forcing you to go the the tanning salon. your arguement ranks right with not standing against smoking because it causes economic harm to the tobacco industry. Heck when did they ever care about what the rest of us had to pay to pay for their cancer causing products.
      • Smokers tax....tanning tax... makes sense to me
        If smokers are going to be taxed extra for their cancer-causing habit, then I think it only makes sense to have a similar tax for tanners. This is equally an unhealthy luxury...
        • Yeah!
          Jobs selling skin cancer need to be protected-!

          Go Brad, keep fighting the good fight!
        • More Jobs lost
          The want a be senator Brad Ellsworth voted for the health care bill. He has no ideal how many jobs in Indiana that he has voted against.These politicians need to represent Indiana and not the far left party.
          • Boo hoo
            "when done properly" is the key. How many tanning salons forego profits to make sure their customers tan "properly," I wonder?

            So Sorry, if your product increases the occurrences of skin cancer (and thus the cost of health care!), then you need to take some responsibility for this and either change your product to be safer or pay up. Just like alcohol, cigarettes, gambling this is another useless industry with a strong presence in Indiana.

            â??If tanning is harmful, shouldnâ??t we shut down all city-run swimming pools and the public beaches in Florida and shouldnâ??t we require everyone on a golf course to wear hats and sun screen.â??

            NO, this logic is absurd. People go to tanning salons and pay money specifically to get a TAN. Your industry is selling tanned skin.

            People that go to pools, beaches, golf courses, etc. do not necessarily do so to get a tan and can take steps to prevent that from happening (e.g. apply SPF 50).
            • pale skin is beautiful
              It's hard to believe that with all of the evidence linking tanning to skin cancer and premature aging people still flock to tanning salons. Wake up people! You'll regret it someday when you have cancer and/or leathery skin.
            • ETS STORY
              Dan, more and more will become known as this healthcare law starts to be implemented...
              ET
            • Too bad
              It's like smoking.... People will still do it in spite of the extra tax. And yes, in case you're wondering, indoor tans do look totally fake. No one in Indiana has sustainable natural tan in January.

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