The Tanning Tax – Another Casualty of Obamacare

In the wake of the King v. Burwell Supreme Court decision, Congress must now turn their attention to fixing the most harmful parts of the law.

Much has been written about the impact Obamacare on families, consumers, and small businesses. A good place to start would be to assist a specific sector of small businesses, comprised largely of women, that has been particularly affected by the legislation.

As it turns out, Obamacare has not been “affordable” (as the official name Affordable Care Act would imply) for women who own tanning salons — or their customers. The so-called Tanning Tax imposed a 10 percent excise tax on tanning bed services, in addition to state sales taxes and taxes paid by the tanning salon owner. The origins of the tax are debatable, but as was the case with much of the Obamacare legislation, “we had to pass the health care bill so we could find out what [was] in it.

Photo Credit: Shutterstock
Photo Credit: Shutterstock

Women are an important part of the equation in the growth of American small businesses, which is why they are a priority of the federal government. The U.S. Small Business Administration has long supported the growth and development of women-owned businesses across the country. Programs such as Women Business Centers, small business loans and federal contracting have enabled women to grow multi-million dollar enterprises, employing hundreds and contributing to a diverse economy. Many women become entrepreneurs because they need flexibility while raising children.

According to the National Women’s Business Council, women-owned firms make up 28.7 percent of all nonfarm businesses across the country and generate $1.2 trillion in total receipts. Women-owned businesses make up more than half (52 percent) of all businesses in health care and social assistance.

Now consider the Tanning Tax’s impact on the tanning industry. According to the American Suntanning Association, since the tax was implemented in 2009, nearly 10,000 tanning salons have closed. According to industry reports, this has resulted in a loss of 81,000 jobs.

Why does this matter to women business owners?

Seventy percent of tanning salons are women-owned, while 95 percent of employees of tanning salons are women; 75 percent of the customers are women. Subsequently, there is a ripple effect: the owners, the employees and the customers have become a casualty of the Tanning Tax.

A brief glance at the most populous states and the impact on job loss is clear. In California, in the year 2009, tanning salons employed 8649 people. Now, that number is 4,617. Florida boasted 7,974 and now 4,617. New York State had 5,508, and now has 2,755. Finally, Texas saw a drop from 7,173 to 3,967.

It is no surprise that some in Congress want to repeal the “Tanning Tax” and have introduced legislation. In the meantime, there are women business owners and employees who have lost businesses, jobs, and their livelihood, while customers are paying more for the service. This was not intended to be the purpose of Obamacare, but it has been a casualty.

When I worked at the U.S. Small Business Administration we often said, “the SBA helps people make their dreams come true.” I think one might now say, the Tanning Tax helped erase some of those dreams.

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