Thanks to the lobbying efforts of the ASPS, Allergan, and plastic surgery portals such as RealSelf.com, women can continue to improve their cosmetic appearance without taxation! For the past few weeks, the proposed 5% tax on cosmetic surgery became known as the Botax. The cosmetic surgery tax would have discriminated against women, since more than 90% of all cosmetic surgery is performed on women.
A last minute amendment to the new Obamacare Health Care bill, HR 3590, dropped the 5% cosmetic surgery tax , but included a 10% tax on tanning services. This tan tax was put in as a substitute for the initially proposed 5% tax on cosmetic surgery. If this bill becomes enacted into law, the tan tax will become effective for tan services rendered after July 1, 2010.
Specifically, the tan tax is applicable to tanning booths which use ultraviolet radiation in the frequency of 200 nanometers to 400 nanometers. Exempt from the tan tax is ‘phototherapy services’ .
The exclusion of tax on cosmetic surgery is a win for women and we salute our lobbyist for a job well done! While we are happy about our own outcome, we can’t help but wonder if this new tax will stifle the tanning industry.
The amendment included in the bill
10907. EXCISE TAX ON INDOOR TANNING SERVICES IN LIEU OF ELECTIVE COSMETIC MEDICAL PROCEDURES.
(a) In General – The provisions of, and amendments made by, section 9017 of this Act are hereby deemed null, void, and of no effect.
(b) Excise Tax on Indoor Tanning Services- Subtitle D of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new chapter:
‘CHAPTER 49–COSMETIC SERVICES
‘Sec. 5000B. Imposition of tax on indoor tanning services.
‘SEC. 5000B. IMPOSITION OF TAX ON INDOOR TANNING SERVICES.
‘(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 lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.
‘(2) EXCLUSION OF PHOTOTHERAPY SERVICES – Such term does not include any phototherapy service performed by a licensed medical professional.
‘(c) Payment of Tax
‘(1) IN GENERAL – The tax imposed by this section shall be paid by the individual on whom the service is performed.
‘(2) COLLECTION – Every person receiving a payment for services on which a tax is imposed under subsection (a) shall collect the amount of the tax from the individual on whom the service is performed and remit such tax quarterly to the Secretary at such time and in such manner as provided by the Secretary.
‘(3) SECONDARY LIABILITY – Where any tax imposed by subsection (a) is not paid at the time payments for indoor tanning services are made, then to the extent that such tax is not collected, such tax shall be paid by the person who performs the service.’.
(c) Clerical Amendment – The table of chapter for subtitle D of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to chapter 48 the following new item:
‘Chapter 49–Cosmetic Services’.
(d) Effective Date- The amendments made by this section shall apply to services performed on or after July 1, 2010.