Woman getting haircut

States are considering a sales tax for hair services. Photo: Getty Images

We recently reported the so-called 5% bo-tax Senate Majority Leader Harry Reid originally authored into the health care bill, as a way to pay for the hulking costs of the legislation.

After outrage from cosmetic surgeons and women across the country, the bo-tax was replaced with a 10% tanning tax -- which Congress switched in after hearing arguments that tanning booths cost the health care industry millions of dollars by causing skin cancer.

Now states are looking to take a page out of the federal government's playbook by passing similar local taxes to help pay for gaping state budget deficits.

The target? Hair.

In Michigan and Nebraska, local governments are considering an extension of the state sales tax to hair salon services.

"These states are expanding the services they're taxing, and a haircut is considered personal grooming and can be seen as a luxury item. And while you might not think a haircut is a luxury item, you could always do it cheaper or at home," Kim Rueben, senior fellow at The Urban Institute Kim Rueben, told CNN.

And don't forget Fido.

Michigan legislators also want to add grooming for pooches, horses and other pets to the list of taxed services, which local business owners say will hit a pet grooming industry hard during an economic time when many are struggling just to get by.

Revenue gathered from the hair-raising tax would go towards the state's school aid fund, according to the Michigan treasury.

Dare we ask what they'll think of to tax next?

If this news doesn't make your hair stand on end, have you heard about tax breaks for mustaches?