Tan Tax and 3/25 FDA Meeting Summary

Indoor tanning professionals faced enormous challenges last week as the industry took the national spotlight in two separate – but equally daunting – scenarios.

First up, the health care bill went through the final stages of being passed. This was the culmination of a lengthy process which grabbed the industry's attention back in December 2009, as the Senate replaced a "Botax" in the eleventh hour with a 10 percent tanning tax. After gaining approval on Christmas Eve, the bill went to committee early in the New Year in attempt to be reconciled with the House's version – which did not contain the tanning tax.

Most recently, after much deliberation, the House passed the Senate's version of the bill (which President Obama then held a televised signing of), but sent it back to the Senate for final deliberation of an unspecified number of potential “fixes.” At this stage of reconciliation, the process only allowed for certain financial-related and procedural concerns to be addressed.

Although we were hopeful that the tan tax would be challenged and dropped at this point, it didn’t happen. The Senate passed the bill with only two minor changes (related to student loans), and it went back to the House for a final vote Thursday night before lawmakers left for their spring break. This chain of events solidifies the tan tax, which applies to all UV services as of July 1, 2010.

Numerous states are in various stages of challenging the health care bill, as it mandates their residents to purchase a product. The states also partner with the federal government in relation to funding Medicaid, so there are concerns about the financial ramifications for individual states. Despite the potential legal challenges to the health care bill, it’s advisable to consider the legislation a done deal and begin preparing for it.

No doubt, salon owners will receive more information from the government prior to the implementation date. Discussions are already under way on TanToday.com, as owners anticipate how their software, packages, pricing and other business essentials will function in light of the new tax. At some point, you may find it beneficial to consult your attorney and/or accountant to ensure you are compliant and following best practices.

The second major event was the 3/25 FDA advisory panel meeting. It was designed to gather information and allow for testimony so an advisory panel could recommend a course of action to the FDA regarding indoor tanning regulations. Some of the outcomes the panel could recommend include: a national parental consent requirement for tanners under certain ages, an outright ban on teen tanning, increased warning signage or equipment labeling, reclassification of equipment and/or lamp specifications.

A strong lineup of representatives from the indoor tanning community – thanks to organizational efforts by the ITA – was on hand to testify regarding the industry’s proactive self-regulatory measures. These include education, training, equipment and software safeguards, skin typing, moderation, etc. There were also several speakers who challenged the opposing side’s “scientific” data, as well as pointing out that there is no concrete evidence to support that a review of this industry is even necessary. The public was invited to submit white papers prior to the meeting, and the ITA did prepare and submit such a document.

Members of the anti-tanning community (dermatologists, health care groups, former beauty queens, medical organizations, and don’t forget Cosmo magazine!) were also present to testify with their concerns.

Representatives of the tanning community who attended Thursday’s meeting reported that it felt heavily stacked on the side of dermatologists. However, no final decisions were made at the meeting. The panel hearing is considered to be only the starting point in what could be a lengthy process in the FDA matter. The ITA has stated its intent to continue representing the industry in this discussion.

It seems that as a professional community, we're back in "wait" mode until we receive further instruction on ways we can unite to better make our voices heard. Until then, keep doing what you do best – running your business and providing the best possible  tanning experience for your customers.

–Karen

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