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Tanning tax is the latest target of Obamacare opponents

July 7, 2015

The Affordable Care Act (ACA) has received, for the second time, the Supreme Court's imprimatur. Following the high court's 6-3 decision on June 25, President Obama declared that the health care law that unofficially bears his name "is here to stay."

Obamacare opponents, however, aren't convinced and are still trying to chip away at the law. The latest anti-ACA approach is to repeal some of the narrower portions of the bill.

Repeal of the medical device tax, an excise tax on manufacturers of items such as artificial joints, pacemakers and defibrillators, has a decent shot of making it through both the House and Senate. Both Democratic and Republican lawmakers don't like this levy.

Now the tanning tax is the target.

Tanning bed fix_Evil Erin via Flickr
Customer using a tanning bed. Photo by Evil Erin via Flickr.

Tax on artificial tanning: The 10 percent tax on users of indoor tanning beds took effect July 1, 2010. It was the first ACA tax to be collected.

Both the medical device and tanning taxes were added to the ACA to help pay some costs associated with the health care law.

Obamacare opponents see removing the revenue streams as a relatively easy way to weaken the law. Rather than fighting for overall repeal, they are able to garner support, even from some Democrats, with the more tax-specific approach.

Lots of heat on tanning tax: Even before the artificial sun worshipers started paying for their treatments, the measure got a lot of attention.

It replaced an earlier proposal to tax some cosmetic surgery procedures; yes, "Bo-Tax" was used.

It was an easy way for late-night comics to make the perpetually bronzed House Speaker John Boehner (R-Ohio) a punchline.

And Jersey Shore alumna Snooki and former GOP presidential candidate John McCain (R-Ariz.) exchanged Twitter denunciations of the tax.

Now, say some Representatives, it time to turn out the lights on the tanning bed tax.

Rep. George Holding (R-N.C.) has introduced the Tanning Tax Repeal Act of 2015. The bill, H.R. 2698, has 25 bipartisan cosponsors.

Lower tax receipts, loss of jobs: Aside from being a way to ding Obamacare, advocates of repeal say the tanning tax isn't bringing in the money that was projected.

Original estimates were that the tanning tax would generate $2.7 billion over a decade, or $270 million a year. So far, however, the Congressional Budget Office says that the tax has added only about $377 million to the U.S. Treasury, an average of about $84 million per year.

Worse, say tax opponents, it is costing jobs.

More than 9,000 salons, or around half of all tanning salons in the United States, have closed since the tax was imposed, resulting in 76,000 jobs lost, according to the American Suntanning Association.

Some, including many physicians, argue that the real reason for the closure of salons is the growing public acknowledgement that tanning beds could contribute to skin cancer. A study by the Centers for Disease Control and Prevention just published in JAMA Dermatology found that tanning bed use is on the decline, especially among young people who are more aware of the health risks.

Still, salon owners, their remaining customers and the lawmakers who represent them are looking to end the tanning tax. We'll keep an eye on the bill to see if it heats up this summer.

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Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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