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Federal Tax Increase on Indoor Tanning: Has it Made a Difference? [An Illinois Statistical Study]

In the summer of 2010, a 10% federal excise tax for tanning salons was put into place as an effort to decrease the number of indoor tanning clients.  The tax was part of the Patient Protection and Affordable Care Act (July 2010) implemented because of the increased risk of melanoma development caused from indoor tanning.
Researchers gathered information from 308 tanning salons in Illinois to see how this tax has affected those tanning businesses that implemented the tax and those that absorbed the tax themselves in order to maintain prices.
The Study, a Quick Glance
1. Out of 726 salons, 647 met qualifying criteria
2. Qualifying Salon Criteria
    a.  Salon was located in Illinois
    b.  Salon’s primary service was tanning and offered UV tanning services
    c.  Salon’s contact information was available on the Internet
    d.  Salon had working telephone number and willing to answer questions on the phone
    e.  Subjects were 18 years or older
3. 168 rural and 558 urban salons qualified
4. 308 salons were surveyed (47% of qualifying urban, 51% of qualifying rural)
5. Median family income for salon location was obtained from 2007 US Census 
What Was Found
Eighty percent of the salons reported to be collecting the implemented tax from clients.  63 of the 75 rural salons were collecting the tax for clients and 185 of the 233 urban salons were collecting the tax.  Salons collecting and salons absorbing both had a median number of 41 clients as well as a similar family income at $51,000 for their area.
Twenty-four percent of rural salons and twenty-six percent of urban salons reported they saw fewer clients after the tax was implemented.  Again, both areas had similar family income reported at $51,000.
Salons reported that 78% of tanning clients did not care about the tax.
The study did not make clear the impact of the tax on tanning salon clients.  The correlation between salon location and which salons implemented the tax was not found.  Of the salons surveyed, only 24-26% reported a decline in client visits per day and researchers found it difficult to distinguish changes in business due to the economic decline and changes because of implemented tax.  
In hopes of a similar outcome to taxation on tobacco, the tax was implemented to deter younger clients from using indoor tanning salons.  However, based off of study results and the statistic of increased salon use in the past two decades, it seems that perhaps a 10% tax increase is simply not enough to affect the demand for indoor tanning services.  The popularity of tanning beds among younger populations who may not seem to notice or care about an increased tax is worth noting, and perhaps a key as to which population must be targeted in laws, taxation and restriction.
Source: Archives of Dermatology
[image by Tripp Chicago]

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