The American Suntanning Association has been working hard to get the upcoming tan tax payment schedule delayed and we need your help NOW! ASA has contacted more than 140 members of the House and Senate to tell the Treasury to delay the tan tax payments and now we need to contact the Treasury as small business owners. Below is an email that EVERY salon owner needs to send to Ms. Jennifer Auchterlonie, Special Counsel for the IRS, to let her know how important it is to delay the tax payment date.
Simply address an email to Jennifer.Auchterlonie@irs.gov. Please include “Delay the Excise Tax on Indoor Tanning” in your email subject line. Then, copy and paste the letter below into the body of your email, add your name, salon name, city and state, at the bottom of the letter and press “send.”
It is extremely important that everyone sends this email NOW to give your business extra time to pay this onerous tax. Be assured, ASA will continue to work toward repealing the tax each and every day.
Dear Ms. Auchterlonie:
As a professional sunbed salon owner, I write to respectfully request the Internal Revenue Service (IRS) delay or even cease the collection of the federal excise tax on indoor tanning services (the Tan Tax), which is due to be filed via Form 720 no later than April 30, 2020. Today, my salons are closed because of the coronavirus epidemic. This closure has hit me during our busiest months when we normally rely on those sales to help us endure slow periods later in the year. Therefore, the loss of business throughout much of Quarter 1 and into Quarter 2 will be particularly devastating to an industry already beleaguered by a federal gross excise tax. The Tan Tax nearly doubles my tax burden in ordinary times. Given the economic straits caused by the coronavirus, depleting my limited cash flow to pay the Tan Tax in April could force me to close my doors, along with as many as 3,000 other salon owners nationally, all before CARES Act relief readily becomes available.
Over the last decade, the Tan Tax on gross revenue has resulted in the closure of more than 11,000 small businesses. More than 110,000 employees lost their jobs because of this tax, and female employees were hit the hardest. Again, approximately 6,700 tanning salons now remain across the country with just over 53,000 employees. With owners questioning whether they may ever re-open and rebuild their businesses, a delay of the quarterly excise tax, especially a lengthy delay, would be beneficial to business owners and employees in our industry.
The Tan Tax is punitive and unfairly applied. The IRS exempted gyms and fitness centers from paying the excise tax in 2012. As a result, the largest single sunbed operator in the country is an untaxed chain of fitness centers. It is hard to compete and pay a gross tax against a competitor exempted from such a tax. The intent of the law and regulations could not have possibly been to distort the playing field and exempt an entire class of sunbed operators from paying the Tan Tax. Furthermore, apartment complexes and other entities seized upon this ruling and now also operate thousands of untaxed sunbeds, yet professional salons continue to pay this onerous tax. Because the tax is so damaging yet so unevenly administered, the tax has only collected $837 million in its 11th year despite Congressional Budget Office projections the tax would have collected $3 billion by year 11. In December 2018, the Joint Tax Committee projected repealing this tax would score at $381 million over the next 10 years. Congress repealed the other three Affordable Care Act health taxes with no offsets at a score of $375 billion. Frankly, when factoring in the cost to administer this tax, lost payroll taxes, lost corporate and personal income taxes, SBA loan defaults, and benefits paid out in public assistance to those who lost jobs, this tax has provided very little benefit to the Treasury while crushing thousands of women-owned small businesses.
Relief from this devastating excise tax will give my business and our industry the best opportunity to keep small businesses afloat and enable thousands of Americans to quickly return to work once the coronavirus abates. I would be most grateful for any assistance you might provide to help us survive.