Tanning tax burns business owners

There is a petition in the lobby of Mount Royal Tanning asking for a repeal of the new tanning tax. It had 13 signatures midafternoon on Friday.

As of Thursday, a 10 percent tax was added to indoor tanning services, designated by federal legislation in December to help pay for heath-care reform. The tax is projected to bring in $2.7 billion over 10 years.

At the salon off Woodland Avenue in Duluth, MN, one of four in the college neighborhood owned by Dawn Johnson, the price of a tanning session went up overnight. This tax could sink small business owners, Johnson said.

“We can’t afford to absorb it ourselves,” said Johnson, who has been in the tanning business for 21 years. “It’s going to force small businesses out of business because we’re going to see fewer tanners with less money. It’s a cost that has to be passed on.”

Manager Heather Johnson was manning the front desk after a busy morning at the shop, and said she hasn’t heard any grumbling about the increase in prices — which do not affect spray tans or mystic tans, or tanning beds that are at health clubs.

“A lot of people, it won’t stop them,” Johnson said. “It’s like the tax for cigarettes to me. It’s pretty similar.”

Jordan Wilmer, a junior at the University of Minnesota Duluth, finished up a session. She pays a monthly membership for the service, which is taken directly from her bank account. She said she noticed that it went up a few dollars, but that she didn’t know about the tax. Paying more doesn’t bother her.

“I’ve been tanning since I was 14,” Wilmer said. “I’ll never stop.”

Frank Curtiss, who owns Baja Tanning in West Duluth and in Kenwood, said this is the slow time for the business, and that he won’t know the full effects of the tax until early 2011. But he has been following the legislation closely.

“It’s a frustrating situation that our industry would be singled out,” he said. “If this tax affects the way I think it will, it will close salons and cause low-income people to get laid off. A lot of people will be saddled with debt.”

Tom Viele, who owns Woodland Tanning — a one-bed space that is attached to Woodland Hair — isn’t planning to raise prices for tanning. It is such a small part of his business, he said, that he will probably just eat the cost at the end of the year. He might even just get rid of the bed, which is used sparingly.

Johnson said she thinks a better target for this tax would have been people who have elective cosmetic surgery — where the patients have more money and procedures cost thousands of dollars. This was originally the plan. But the “Botax,” a 5 percent tax on cosmetic surgery services, was dropped after heavy lobbying by implant manufacturers and plastic surgeons. Congress replaced the “Botax” revenue with the tax on tanning salons.

Friday afternoon, they were adding beds to 24 Hour Tanning, a sort of self-service center which is next door to Mount Royal Tanning. Johnson said staffing costs are her biggest expense, and that will be where her businesses will experience cuts.

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