The horse-trading that helped win doctors’ support for the health-care overhaul included replacing a proposed 5% tax on Botox treatments and elective cosmetic procedures with a 10% tax on indoor tanning services.
The tanning tax made it into the final law and is supposed to raise $2.7 billion over 10 years. The tanning industry’s trade group has been saying anyone who thinks the revenue target is realistic has been standing out in the sun too long. “It’s almost laughable,” the head of the Indoor Tanning Association told the WSJ in December.
An article in the Hill today walks through the math in more detail, using the association’s estimate that there are about 25,000 tanning-bed salons, including some gyms and nail salons, that would be subject to the tax. On that basis, each tanning business would have to collect $108,000 in taxes over the decade to get to the $2.7 billion revenue estimate, the group says.
Some 30 million Americans currently visit tanning salons at least once a year, according to the group. Based on an estimated cost of $7 per session, those customers would have to make about 3.9 billion visits over the decade to hit the tax target.
The Joint Committee on Taxation, which came up with the $2.7 billion figure, told the Hill it couldn’t divulge the economic models it used for the revenue estimate.
Dermatologists and other backers of the tanning tax, which doesn’t apply to sessions done for medical reasons, say it’s a good idea because it will discourage people from being exposed to added cancer risk.
Correction: This post originally said each tanning business would have to collect $108 million in taxes over the decade to get to the $2.7 billion revenue estimate.
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