LINCOLN — Fans of indoor tanning have been getting that summertime glow for a little less dough in Nebraska recently.
Nebraska officials approved a rules change in mid-November that exempts tanning salons from state sales taxes.
But critics of indoor tanning, which is linked to potentially deadly skin cancers, hope the tax break will be short-lived. They are looking to get the tax reinstated during the coming legislative session.
“I think it's the right thing to do, both for tax policy and for the health of Nebraskans,” said Dr. David Watts, an Omaha dermatologist.
The critics, however, may find it harder to revive the tanning tax than it was to block legislation aimed at freeing tanning salons from sales taxes.
Salon owners tried and failed twice to get an exemption passed by the Legislature.
State Sen. Galen Hadley of Kearney, the Revenue Committee chairman, said he doesn't know whether a bill to reinstate a tanning tax could make it out of committee, given the anti-tax mood of most lawmakers.
He's skeptical about the idea of reinstating the tax himself, saying it raises questions about whether tax policy should be used for social purposes.
“I guess I'd have to take a long, hard look at it to see whether it's something we should do,” he said.
Tanning salon owners have been fighting for a state sales tax exemption since 2010.
They argued that the exemption was needed to help their businesses survive after the federal health care law imposed a 10 percent tax on them.
After their legislative efforts failed in 2011 and 2012, the salon owners took a different tack.
Starting in late 2012, they pushed for the Department of Revenue to remove tanning salons from the “places of amusement, entertainment or recreation” listed in its rules and regulations.
They argued that indoor tanning had been misclassified as a taxable admission charged for entertainment or recreation, rather than as a service such as a haircut and manicure. Services generally are not taxed in Nebraska.
Former Lt. Gov. Rick Sheehy, followed by current Lt. Gov. Lavon Heidemann, threw their weight behind the effort.
Heidemann sent a letter June 20 directing then-Tax Commissioner Doug Ewald to begin the rules change process.
While Gov. Dave Heineman had expressed support for the tanning industry previously, he did not get involved with pushing for a rules change, according to his spokeswoman, Jen Rae Wang.
She said the governor wanted to avoid a potential conflict of interest because his son owns a health club that includes tanning beds.
Current Tax Commissioner Kim Conroy signed off on the proposed rules change shortly after being appointed to replace Ewald. The governor and attorney general also approved the change.
Conroy said Revenue Department legal staff concluded that proponents “maybe had a point” about the misclassification of tanning salons.
She said opponents of the change, including the Nebraska Dermatology Society and the American Academy of Dermatologists, had not offered a legal basis for keeping the sales taxes on indoor tanning.
Critics took issue with the idea that tanning salons had been misclassified.
Sen. Jeremy Nordquist of Omaha questioned why tanning salons should be exempted but not gymnasiums or health clubs.
Gyms and health clubs are subject to the admissions sales tax.
“If we're going to eliminate taxes, why would we choose one that we know is associated with a harmful outcome?” Nordquist asked.
He said he has legislation ready that would reinstate the tanning tax and will probably introduce it in January, although he acknowledged that it may be difficult to persuade lawmakers to impose a tax now that it has been removed.
The rules change was welcome news for salons, said Heather Almond, executive vice president of Ashley Lynn's Inc., which operates Palm Beach Tan franchises in Nebraska.
The exemption will mean an estimated $850,000 loss of tax revenue to the state, which translates into an equal amount of savings for tanning fans.
Almond hopes that savings will help salons reverse their recent sales slide. About half of the salons operating three years ago, when the federal tax went into effect, have closed.
“We're hopeful that the exemption will have the reverse effect, and we will see our sales go back up,” she said.
In the meantime, Nordquist plans to keep working on a bill that would ban teenagers from indoor tanning.
He said he intends to sit down with interested parties early in the legislative session to work out a compromise on Legislative Bill 132, which remains in committee.
The measure would add Nebraska to the growing number of states prohibiting tanning by minors.
Six states ban tanning for youngsters under age 18, according to the National Conference of State Legislatures. Eleven states have bans affecting younger teens, and several others require parental approval for minors.