Say goodbye to the "Botax" and hello to the tan tax.
Marking their latest attempt to find a politically palatable way to pay for health reform, Senate Democrats dropped a tax on cosmetic surgeries in favor of a new one on indoor tanning.
Senate Majority Leader Harry Reid included the taxing switch as part of a package of amendments released over the weekend, which were aimed to get all 58 Democrats and two independents on board. It appears he succeeded and now with 60 supportive senators, Reid can overcome any Republican attempt to block the health reform bill. A final vote is expected to take place on Christmas Eve.
"I'm glad the cosmetic surgery tax at least for now is out, but we are not ready to celebrate just yet," said Renalto Saltz, a Utah physician and the president of the American Society for Aesthetic Plastic Surgery.
He remains cautious because his group was caught flat-footed in late November, when Reid added a 5 percent tax on everything from face-lifts to breast augmentations to his version of the bill.
Senate leaders expected the cosmetic surgery tax to raise $6 billion in the next decade, only a small portion of the money needed to create a new social safety net to help insure low- to middle-income Americans. But that was $6 billion more than cosmetic surgeons wanted their customers to pay.
It took only hours for cosmetic surgeons to start an aggressive lobbying campaign.
Saltz, who runs a private practice in Holladay, was deeply involved in the effort, which focused on getting former patients to complain to their senators. Groups such as the aesthetic plastic surgery society also lobbied other doctors' organizations to come to their defense. Saltz said they created a coalition of 22 surgical societies, involving some of the nation's biggest groups including the American Medical Association.
Together, they argued the tax unfairly focused on women and marked the first time an individual medical procedure would be taxed. They also suggested the tax could lead more people to leave the country for less regulated cosmetic procedures.
Their campaign succeeded and Reid turned his sights on the oft-maligned indoor tanning industry, which has seen recent scientific studies linking its services to skin cancer. State legislatures have also moved to limit teens' access to indoor tanning. A 2007 law in Utah requires teenagers to get their parents' permission before going under the UV-lights.
Now the Senate bill would impose a 10 percent sales tax on those services.
"Tanning salons have always been a target," said Brian Moser, the owner of Tanning Oasis, with locations in Roy and Layton. He said salon owners are often considered the "bad guys" though he says people often discount the benefits of tanning, which provides Vitamin D.
He also argued that adding the new tax during a down economic time will hurt his business and those like it.
"It is a pretty steep tax to be slapping on people," he said.
A tanning session at one of Moser's businesses costs between $6 for a regular bed to $22 for a top-of-the-line machine, meaning a 10 percent tax will raise costs from 60 cents to $2.20 per customer.
The Senate estimates that this tax would raise $270 million each year.
"This will be really, really hard on the industry," particularly small-business owners like Moser, said John Overstreet, the executive director of the D.C.-based Indoor Tanning Association, which represents the 20,000 salon owners nationwide.
Just like the cosmetic surgery tax, this new levy took Overstreet and his industry by surprise.
"We heard rumors of it about a week ago," he said.
Overstreet said Senate Democrats made the switch without all of the information.
"I just don't think this has been thought out by policy makers," he said. "There is absolutely no difference between getting a sun tan indoors and getting a sun tan outdoors."
He promised to start his own lobbying effort, with the hopes of replicating the success of the cosmetic surgeons.
But with the final Senate vote slated for Thursday, the tanning industry's best bet may be to work with House and Senate negotiators who would seek a compromise between the two health bills. The House version didn't include a cosmetic surgery tax or an indoor tanning tax.
The tan tax
The Senate health reform bill would now impose a 10 percent sales tax on indoor tanning, which is expected to raise $2.7 billion over the next decade.
This new tax would boost prices from a few dimes to a few dollars.

