The Tanning Tax’s Unintended(?) Consequence
Jason Kuznicki wonders whether the tanning tax will have the unintended consequence of actually incentivizing those whose gyms have tanning beds into using them more. Reason being, the tanning tax wouldn’t apply to tanning beds that are part of a gym service. Thus, gyms could offer tanning services for “free” as part of a gym membership, and tanning-lovers would flock to such establishments to crisp themselves.
I don’t think that’s right. Instead, I think there’s a completely different unintended consequence. Read the salient portions of Section 5000B:
(a) IN GENERAL.—There is hereby imposed on any indoor tanning service a tax equal to 10 percent of the amount paid for such service (determined without regard to this section), whether paid by insurance or otherwise.
(b) INDOOR TANNING SERVICE.—For purposes of this section—
(1) IN GENERAL.—The term ‘indoor tanning service’ means a service employing any electronic product designed to incorporate 1 or more ultraviolet vidual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.
Trace through the language like so: The tax is on “indoor tanning service.” Now, “indoor tanning service” is a specially defined term, meaning that whenever you see that term, it actually refers to any “service employing any electronic product . . . to induce skin tanning”—i.e., a tanning bed. So the relevant question is, is your gym a “service employing” a tanning bed? If your gym offers tanning beds to its members, you better believe it. In this case, then, your entire gym membership is an “indoor tanning service” under Section 5000B.
What does this mean? It means that you will have to pay the 10% tax on your entire gym membership. And what this means, practically speaking, is that gyms will simply stop offering tanning beds as part of any all-inclusive gym membership package. If they want to use tanning beds, they’ll go use them at places where the tax is limited to the tanning beds rather than get assessed a 10% tax on using dumbbells and attending spin class (is that still a real thing?).