It seems as though the Tan Tax didn\u2019t bring in what the IRS was hoping for. USAToday.com published an article titled, \u201cUnderdone: Tanning tax revenue falls short of estimates,\u201d which states that revenue received was well below projected numbers.<\/p>\n
The Congressional Joint Committee on Taxation \u201cestimated the tax would raise $50 million in the last three months of fiscal year 2010 and $200 million for the full 2011 fiscal year.\u201d However, only $54.4 million was collected between July 1, 2010 and March 31, 2011. That\u2019s less that two thirds of the original estimate.<\/p>\n
The Treasury Inspector General for Tax Administration blames the IRS\u2019 lack of urgency to collect, and the incomplete information given to salon owners.<\/p>\n
“The IRS quickly implemented the tanning tax under a tight deadline,” says J. Russell George, head of the inspector general’s office. “Since this was a brand new tax imposed on a group of businesses and taxpayers with no previous experience with excise taxes, the IRS should have done more to inform taxpayers of their filing responsibilities and bring them into compliance in a timely manner.”<\/p>\n
What does all this mean for the tanning industry? It seems only time will tell. New measures are being implemented to ensure all tanning businesses were notified and complied with the levy, but it\u2019s possible the revenue expected from the Tan Tax was grossly miscalculated, which is what members of the tanning industry have been saying from the beginning.<\/p>\n