'Tanning Tax' in Health Care Law Has Patrons, Industry Burning

March 25, 2010— -- Tan-a-holics, prepare to be singed. Uncle Sam will begin collecting a 10 percent tax on all indoor tanning sessions starting July 1, as part of a little-known provision in the new health care reform law.

"That's a pretty big chunk," said James Sims, 28, an avid indoor tanner in New York, who typically spends about $400 a year on a package of 10-minute tanning sessions.

"I'd never buy a plan like that now. … I'm already nickel and dimed on stuff," and with growing health worries, it's just not worth it, he told ABC News.

Sims, one of an estimated 28 million Americans to lie under indoor ultraviolet rays each year, said the so-called "tanning tax" caught him by surprise.

The measure is buried on page 902 of the 906-page health reform bill and was added in late December after lawmakers removed the "Botax" on elective cosmetic procedures, such as Botox and breast implants.

The measure also has members of the body-bronzing industry fuming.

"If you're going to tax us, you should tax the travel industry and cruise industry, which also profit from sun worshippers," said Don Feltham, chief financial officer of JK Products and Services in Jonesboro, Ark., the world's largest manufacturer of indoor tanning equipment.

Feltham said the new tax would likely hurt profits at thousands of small independent tanning salons across the country, already under pressure from the recession.

Industry leaders fear consumers may cut back on the number of sessions they buy because of the higher cost, which in turn would hinder expansion of salons and financially imperil others. It might also encourage would-be new salon entrepreneurs to stay out of the business.

"I find it absurd," said Jerry Deveney, author of "Sun Business" and longtime sales manager at JK Products, of the tax. "We don't mind paying a tax on our industry, but it should be fair across all of the cosmetic industry."