Tax Collections and Spending as a Potential Measure of Health Policy Association With Indoor Tanning, 2011-2016 | Dermatology | JAMA Dermatology | JAMA Network
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Table.  Indoor Tanning Services Excise Tax—Projections, Collections, and Returns
Indoor Tanning Services Excise Tax—Projections, Collections, and Returns
1.
Waters  H, Adamson  A.  The health and economic implications of the use of tanning devices  [published online February 28, 2017].  J Cancer Policy. doi:10.1016/j.jcpo.2016.12.003Google Scholar
2.
Jain  N, Rademaker  A, Robinson  JK.  Implementation of the federal excise tax on indoor tanning services in Illinois.  Arch Dermatol. 2012;148(1):122-124.PubMedGoogle ScholarCrossref
3.
2014 Internal Revenue Service Data Book. https://www.irs.gov/pub/irs-soi/14databk.pdf. Published March 2015. Accessed August 23, 2017.
4.
Internal Revenue Service. SOI Tax Stats—Affordable Care Act (ACA) Statistics. https://www.irs.gov/uac/soi-tax-stats-affordable-care-act-aca-statistics. Updated September 12, 2017. Accessed August 23, 2017.
5.
The Joint Committee on Taxation. JCX-17-10 download. https://www.jct.gov/publications.html?func=showdown&id=3672. Accessed August 23, 2017.
6.
Guy  GP  Jr, Watson  M, Seidenberg  AB, Hartman  AM, Holman  DM, Perna  F.  Trends in indoor tanning and its association with sunburn among US adults.  J Am Acad Dermatol. 2017;76(6):1191-1193.PubMedGoogle ScholarCrossref
7.
Buller  DB, Cokkinides  V, Hall  HI,  et al.  Prevalence of sunburn, sun protection, and indoor tanning behaviors among Americans: review from national surveys and case studies of 3 states.  J Am Acad Dermatol. 2011;65(5)(suppl 1):S114-S123.PubMedGoogle ScholarCrossref
8.
Tynan  MA, Morris  D, Weston  T.  Continued implications of taxing roll-your-own tobacco as pipe tobacco in the USA.  Tob Control. 2015;24(e2):e125-e127.PubMedGoogle ScholarCrossref
9.
Nuti  SV, Wayda  B, Ranasinghe  I,  et al.  The use of Google trends in health care research: a systematic review.  PLoS One. 2014;9(10):e109583.PubMedGoogle ScholarCrossref
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Research Letter
May 2018

Tax Collections and Spending as a Potential Measure of Health Policy Association With Indoor Tanning, 2011-2016

Author Affiliations
  • 1Medical Student, Perelman School of Medicine, University of Pennsylvania, Philadelphia
  • 2Department of Dermatology, Perelman School of Medicine, University of Pennsylvania, Philadelphia
JAMA Dermatol. 2018;154(5):613-614. doi:10.1001/jamadermatol.2018.0161

As part of the Affordable Care Act (ACA), a 10% excise tax was imposed on the provision of indoor tanning services in July 2010. Besides funding health insurance expansion, the tax was designed to discourage indoor tanning, which significantly increases the risk of developing melanoma and nonmelanoma skin cancer and costs over $343 million annually in direct medical care.1 Although reported adherence had been high in 1 state,2 the Internal Revenue Service (IRS) acted to improve adherence nationally in 2011 and 2012. Tax collections are proportional to US consumer spending on indoor tanning services and correlated with the prevalence of indoor tanning.

Methods

Annual collections and the number of quarterly returns filed for the indoor tanning services excise tax from 2011 to 2016 were extracted from the 2014 IRS Data Book,3 IRS ACA statistics,4 and a Freedom of Information Act request filed with the IRS. Revenue projections were obtained from the Joint Committee on Taxation’s 2010 report.5 For comparison, growth in US consumer spending on services was estimated by personal consumption expenditures on services (PCESV), a measure tracked by the Bureau of Economic Analysis. All statistical analyses were conducted using Microsoft Excel (Microsoft Corp). This study was deemed exempt by the University of Pennsylvania Institutional Review Board.

Results

From 2011 to 2016, collections decreased by 13.0% and the quantity of returns filed fell by 21.3% (Table). Each of these percentages peaked during the 2012-2013 period and have declined each year since then. Collections were substantially below ACA projections in all years. From 2011 to 2016, PCESV rose by 22.6%.

Discussion

Our findings indicate that US consumer spending on indoor tanning and the number of indoor tanning providers have diminished considerably since 2013. Moreover, the contraction in consumer spending on indoor tanning is even more apparent compared with the growth in overall consumer spending. These results are consistent with survey studies suggesting a decrease in the prevalence of indoor tanning since 2010.6 Previous surveys demonstrate that the prevalence of indoor tanning had been increasing as late as 2009,7 implying a trend reversal coinciding with the tax’s implementation.

Using non–survey-based methods to assess the association of health policies with population behavior can provide complementary and perhaps more reliable evidence of such trends. Recently, historical tax revenues have been used to estimate the effects of taxes on other harmful health behaviors, including tobacco consumption,8 and search pattern tools, such as Google Trends, have been used to study myriad aspects of population behavior.9

Our study is limited by exclusion of qualified physical fitness facilities, whose membership fees are exempted from the tax if tanning services are incidental to the primary business activity. This post-ACA exemption may have contributed to the discrepancy between projections and collections. In addition, quantifying the prevalence of indoor tanning using tax collections requires pricing and adherence data, which were unavailable. Thus, the rise in collections and returns from 2011 to 2012 may reflect an increased adherence rather than a true increase in tanning services. Finally, although the decrease in returns from 2012 to 2016 likely owes to tanning industry decline, it may also reflect consolidation among tanning businesses.

The excise tax has been criticized for causing tanning industry job losses and failing to meet revenue projections; however, these considerations are secondary to the public health objective of deterring indoor tanning. Although the data demonstrate that indoor tanning has decreased significantly since the tax’s implementation, they cannot confirm a causative association. Future studies should investigate the relative effects of the tax and other restrictions and initiatives on indoor tanning practices.

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Article Information

Corresponding Author: Jules B. Lipoff, MD, Department of Dermatology, Perelman School of Medicine, University of Pennsylvania, Penn Medicine University City, 3737 Market St, Ste 1100, Philadelphia, PA 19104 (jules.lipoff@uphs.upenn.edu).

Accepted for Publication: January 23, 2018.

Published Online: April 11, 2018. doi:10.1001/jamadermatol.2018.0161

Author Contributions: Mr Jayakumar and Dr Lipoff had full access to all the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Study concept and design: Jayakumar.

Acquisition, analysis, or interpretation of data: Both authors.

Drafting of the manuscript: Jayakumar.

Critical revision of the manuscript for important intellectual content: Both authors.

Statistical analysis: Jayakumar.

Study supervision: Lipoff.

Conflict of Interest Disclosures: Mr Jayakumar reports receiving Enrolled Agent status from the Internal Revenue Service. No other conflicts were reported.

References
1.
Waters  H, Adamson  A.  The health and economic implications of the use of tanning devices  [published online February 28, 2017].  J Cancer Policy. doi:10.1016/j.jcpo.2016.12.003Google Scholar
2.
Jain  N, Rademaker  A, Robinson  JK.  Implementation of the federal excise tax on indoor tanning services in Illinois.  Arch Dermatol. 2012;148(1):122-124.PubMedGoogle ScholarCrossref
3.
2014 Internal Revenue Service Data Book. https://www.irs.gov/pub/irs-soi/14databk.pdf. Published March 2015. Accessed August 23, 2017.
4.
Internal Revenue Service. SOI Tax Stats—Affordable Care Act (ACA) Statistics. https://www.irs.gov/uac/soi-tax-stats-affordable-care-act-aca-statistics. Updated September 12, 2017. Accessed August 23, 2017.
5.
The Joint Committee on Taxation. JCX-17-10 download. https://www.jct.gov/publications.html?func=showdown&id=3672. Accessed August 23, 2017.
6.
Guy  GP  Jr, Watson  M, Seidenberg  AB, Hartman  AM, Holman  DM, Perna  F.  Trends in indoor tanning and its association with sunburn among US adults.  J Am Acad Dermatol. 2017;76(6):1191-1193.PubMedGoogle ScholarCrossref
7.
Buller  DB, Cokkinides  V, Hall  HI,  et al.  Prevalence of sunburn, sun protection, and indoor tanning behaviors among Americans: review from national surveys and case studies of 3 states.  J Am Acad Dermatol. 2011;65(5)(suppl 1):S114-S123.PubMedGoogle ScholarCrossref
8.
Tynan  MA, Morris  D, Weston  T.  Continued implications of taxing roll-your-own tobacco as pipe tobacco in the USA.  Tob Control. 2015;24(e2):e125-e127.PubMedGoogle ScholarCrossref
9.
Nuti  SV, Wayda  B, Ranasinghe  I,  et al.  The use of Google trends in health care research: a systematic review.  PLoS One. 2014;9(10):e109583.PubMedGoogle ScholarCrossref
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