‘Tax Tax’ Repeal Remains on the Table as Congress Recesses

The U.S. Senate’s bill introduced in June to repeal and replace the Affordable Care Act included 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.

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.

Senate Republicans pushed for the passage of the bill before Congress recessed for the month of August (due to print deadlines, this article does not include any developments that occurred after July 15). If the Senate did not and cannot agree on a replacement health care bill at present, there is a chance that the Affordable Care Act could still be repealed without an immediate replacement. That action would also abolish the Tan Tax.

“We believe if they can’t pass this carefully crafted repeal and replace bill — do those two things simultaneously — we ought to just repeal only. And then have enough time built into that legislation to craft replacement legislation in a way that’s orderly […],” Vice President Mike Pence said on “The Rush Limbaugh Show” in July.

Even if the bill is not passed in its current form, ASA representatives on Capitol Hill remain confident that the Tan Tax repeal is an important issue in Congress and will be included in any future replacement bills.

“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. The tax also gave fitness clubs a major market advantage over free-standing tanning salons by exempting these businesses from the devastating tax. While tanning salons are closing, fitness clubs are adding more and more UV tanning units and taking advantage of the federal government giving certain market segments an unfair advantage.

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