‘Tan Tax’ In Senate Health Care Bill

tan taxWASHINGTON, DC (June 22) — The American Suntanning Association announced Thursday that the U.S. Senate’s bill introduced Thursday to repeal and replace the Affordable Care Act includes a provision to repeal the 10 percent ‘Tan Tax’ on Sept. 30 — one quarter earlier than the tax repeal date in legislation that already passed the U.S. House of Representatives in May.
Republican Senate leaders have told the press they want to move quickly on this bill. The New York Times reported Thursday that leaders want debate and a vote to all take place before the July 4 holiday.

Senate passage of the bill would lead to a conference committee reconciling differences between the House and Senate bills, which then would need to be approved by both bodies before being signed into law by the President. The conference committee is where the date of the Tan Tax repeal would be decided.

There’s work left to do, but the Tan Tax is closer to the scrap heap than ever.

“The amount of effort that went into putting us in this position is beyond colossal,” ASA President Melinda Norton said. “The ASA federal lobbying team – both staff and volunteers – has put thousands of hours into telling our story on Capitol Hill: that the tax failed as a revenue producer for Obamacare, closed more than 9,000 businesses, killed 95,000 jobs and pushed those who wish to use sunbeds into non-salon tanning where sunburn was more likely. Congress understands: It’s hard to imagine any other way the tax could have been a failure.”

What that means is this: After four years and more than 1,200 meetings with members of Congress on Capitol Hill, the American Suntanning Association’s cornerstone lobbying objective – repealing the devastating 10 percent Tan Tax – is closer than ever to happening.

The 10-percent Tan Tax was fiscally irresponsible and totally ineffective. That’s why 112 members of Congress from both parties signed on as co-authors and sent a stand-alone bill to President Obama’s Desk (2015 HR 2698) to repeal it and why it is once again on the chopping block. This failed tax raised significantly less than one-third of what was projected and cost the government $11 million a year to collect while closing more than 9,000 American tanning salons and killing 95,000 jobs. Those closures cost the treasury revenue and involved countless SBA loan defaults. All-in-all, this tax may have actually cost the treasury money.

As an unintended consequence the 10% tax led to a large increase in non-salon tanning in apartment complexes, home sunbeds and unregulated units in non-salon locations — places without professional operators trained to properly set exposure times to minimize the risk of sunburn. So the tax failed as a revenue producer for the ACA, closed more than 9,000 businesses, killed 95,000 jobs and pushed those who wish to use sunbeds into non-salon tanning where sunburn was more likely.

As Norton said, it’s hard to imagine any other way the tax could have been a failure.

Tan Tax Timeline:

  • August 2009: A 5% tax on cosmetic surgery procedures — commonly known as the “Botax” referring to Botox injections, dermatology’s most-common cosmetic procedure — is part of the Affordable Care Act.
  • December 2009: Allergan Corporation and the American Medical Association lobby to remove the “Botax” and substitute the “Tan Tax” just days before the final Senate vote on The Affordable Care Act. The Tan Tax has produced less than $85 million a year (CBO) while costing $11 million a year to collect — netting less than 10 percent of what the “Botax” likely would have produced to fund health care.
  • July 1, 2010: The 10% “Tan Tax” goes into effect. The tax takes effect before IRS could develop and communicate any plans on how to collect it.
  • June 9, 2015: U.S. Rep. George Holding (R-North Carolina) and U.S. Rep. Collin Peterson (D-Minnesota) introduce HR 2698 — a stand-alone bill to repeal the 10% Tan Tax. By 2016 the bill gains 112 co-sponsors from both parties and Congress passes the bill and sends it to President Obama’s Desk in December 2016.
  • February 2017: Rep. Holding and Rep. Peterson re-introduce 2017 HR 1150 — a stand-alone bill to repeal the 10% Tan Tax.
  • June 2017: Elimination of the 10% Tan Tax is part of Congressional plans for health care reform in both the House and Senate.