Who Pays: That 10% excise tax is paid by the person using the indoor tanning service.
Who collects and remits the tax?
The business that provides the indoor tanning service is responsible for collecting the tax from the customer and remitting it to the federal government If they do not collect the tax the service provider still has to pay.
How to Report
The tax is reported quarterly through IRS Form 720 (Quarterly Federal Excise Tax Return).
Filing Deadlines:
For tax collected in January, February, and March: April 30
For tax collected in April, May, and June: July 31
For tax collected in July, August, and September: October 31
Required date for tax paid in October, November and December October, November and December
If a due date is on a weekend / holiday, then the due date is the next business day.
Online Filing: You can electronically file Form 720 through an IRS-approved e-file provider. There are online services specialising in excise tax and tanning tax (e. g. TaxExcise. com Simple 720).
Payment methods for E-filers Payment can generally be made through electronic funds transfer (either on the e-filer provider’s website or with a tax professional), as well as using the free secure Electronic Federal Tax Payment System (EFTPS).
Paper Filing: If filing a paper return, attach a payment (check or money order made out to “United States Treasury”) to Form 720-V, Payment Voucher, and mail it to the address provided with the instructions to Form 720.
EIN requirement You need an Employer Identification Number (EIN) to file Form 720. You can apply and receive an EIN online from the IRS.
Key Points about the Tax:
The tax rate is 10% of the amount paid for indoor tanning service.
If the tax is not explicitly stated separately on the invoice the quantity charged is assumed to include the tax i. e. the provider multiplies the amount of invoice by 0. 09091 to reach the tax amount i. e. amounts paid.
Exemptions:
The tax does not apply to:Spray-on tanning services.
Topical creams and lotions.
Phototherapy services performed by a licensed medical professional on their premises.
Membership fees for certain “qualified physical fitness facilities” where tanning is an incidental service offered to members without a separately identifiable fee.
Where to Find More Information:
IRS Website: There is an “Indoor tanning services tax center” (on the IRS website) with information and FAQs about indoor tanning. You can also find instructions for Form 720 there.
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