This whole tattoo thing is crazy - literally. If a person who owns a company likes tattoos - he'll hire tattooed people instead of un-tattooed people - and visa-versa. Anyone who gets a tattoo should know up front that they are making a statement to everyone who sees the tattoo, "Hey, look at me! I'm different!!!" Now, that may not be what they wanted, but that's what they'll get. The person with Pink hair makes more sense to me, because at least it'll grow out.
It may not be illegal, but I would come up with a better reason when asked why they weren't offered the job. I'd say we had another applicant that was more qualified or we went another direction, something like that because " the tats don't cut it " is a pretty weak reason not to hire someone.