Many businesses offering indoor tanning services are required to collect a 10 percent excise tax on the indoor tanning services they provide. The provider must pay the excise tax to the government, quarterly, while reporting IRS Form 720, Quarterly Federal Excise Tax Return. The following information is designed to help indoor tanning services providers understand how to collect, file and pay the tax.
The tax on indoor tanning service is 10% of the amount paid for that service. The tax is paid by the person paying for the indoor tanning service and is collected by the person receiving payment for the indoor tanning services. The person receiving the payment for indoor tanning services (collector) must collect and remit the tax and file the return. If the tax is not collected for any reason, the collector is liable for the tax. Like other any other tax return, the tanning service provider must maintain adequate books and records showing the amount of revenue received for indoor tanning services.
Indoor tanning service means a service employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. The term does not include phototherapy service performed by, and on the premises of, a licensed medical professional (such as a dermatologist, psychologist, or registered nurse). See Regulations section 49.5000B-1 for more information and special rules for qualified physical fitness facilities, undesignated payment cards, and bundled payments.
More information on Indoor Tanning Service Excise Tax
Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services. If the customer fails to pay the excise tax, the tanning service provider is liable for the tax. The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises. The tax does not apply to spray-on tanning services.
If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services. If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services. The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.
Tanning service providers must report and pay the excise tax on a quarterly basis.