IRS issues regulations on tanning tax

The Internal Revenue Service issued regulations Friday on a 10 percent excise tax hitting the indoor tanning industry July 1. 

Owners of tanning businesses will collect the tax when service is rendered and pay the IRS quarterly. The tax is designed to raise about $2.7 billion over 10 years to help pay for healthcare overhaul legislation that passed in March. 

The tax applies to salons that use one or more ultraviolet lamps. Spray tans and tanning lotions don't fall under the tax. 

Although the tax drew the ire of the tanning industry, it's difficult to gauge the economic effects on salons. Most tanning services range between $10 and $20, meaning between $1 and $2 will be added to a bill. Some businesses owners, who've said they have had to raise prices during the recession, don't believe the added cost will push customers away. 

Others argue that studies showing the negative impact of tanning could have a greater effect than the new tax. 

Still, some interest groups for the industry have argued that it's bound to affect some businesses. 

The tax doesn't apply to phototherapy services performed by a licensed medical professional, and the regulations also provide an exception for certain fitness facilities that offer tanning as an incidental service to members without a separate fee, the IRS said Friday in a release.