Introduction
The Indoor Tanning Services Excise Tax is a 10% federal tax imposed on indoor tanning services under the Affordable Care Act (ACA). Businesses that offer tanning services must collect, report, and remit this tax to the IRS using Form 720 (Quarterly Federal Excise Tax Return). Failure to comply can lead to penalties, fines, and IRS audits. This guide explains how the tanning excise tax works and how to properly file Form 720 to stay compliant.
What Is the Tanning Excise Tax?
The tanning excise tax was introduced as part of the ACA in 2010 to help fund healthcare initiatives. It applies to indoor UV tanning services provided by tanning salons, spas, gyms, and other businesses.
Who Needs to Pay the Tanning Excise Tax?
- Standalone tanning salons offering UV tanning services.
- Gyms, spas, and beauty salons that provide indoor tanning sessions (unless included as a free service in membership fees).
- Mobile tanning businesses using indoor tanning equipment.
Exemptions from the Tanning Tax
The following are NOT subject to the tax:
- Spray tanning and sunless tanning products (only UV tanning is taxed).
- Medical phototherapy services provided by licensed professionals.
- Tanning services included in gym memberships where no separate fee is charged.
How to File Tanning Excise Tax Using Form 720
The IRS requires businesses offering indoor tanning services to file Form 720 quarterly. Here’s how you can do it:
Step 1: Obtain Form 720
- Download Form 720 from the IRS website.
- You can file electronically using IRS-authorized e-file providers.
Step 2: Complete the Required Sections
- Business Information: Enter your business name, EIN (Employer Identification Number), and tax period.
- Part I – IRS No. 140: The tanning tax falls under IRS No. 140 in Part I of Form 720.
- Calculate the Tax: Report total tanning service revenue, multiply by 10% (0.10), and enter the amount due.
- Total Taxes and Payment: Add up all excise taxes and make the payment accordingly.
Step 3: File Form 720 on Time
Form 720 due dates (filed quarterly):
| Quarter | Tax Period | Due Date |
| Q1 | Jan 1 – Mar 31 | April 30 |
| Q2 | Apr 1 – Jun 30 | July 31 |
| Q3 | Jul 1 – Sep 30 | October 31 |
| Q4 | Oct 1 – Dec 31 | January 31 |
Payment & Submission Methods
- Electronic Payment: Use the Electronic Federal Tax Payment System (EFTPS).
- Mailing a Check: If filing by paper, send Form 720 along with a check or money order to the appropriate IRS address listed on the form instructions.
- E-File: The IRS recommends e-filing for faster processing.
Avoiding Penalties & Common Mistakes
Failure to comply with tanning excise tax regulations can lead to IRS penalties. Here’s how to avoid common mistakes:
Common Mistakes to Avoid
Not Collecting the Tax from Customers – Always add the 10% tax to the service price and collect it at the time of payment.
Late Filing or Payment – Missing deadlines can result in penalties and interest charges.
Incorrect Calculation – Ensure that you accurately calculate the tax based on total tanning service revenue.
Failing to Keep Records – Maintain invoices, tax reports, and payment records for at least four years in case of an IRS audit.
FAQs About the Tanning Excise Tax
1. Can I pass the tax to customers?
Yes. Most businesses add the 10% tax to the customer’s bill, similar to sales tax.
2. What happens if I don’t file Form 720?
Failure to file can result in penalties and interest charges from the IRS.
3. Can I e-file Form 720?
Yes! The IRS encourages e-filing for faster processing and fewer errors.
4. What if my business no longer offers tanning services?
If you stop providing UV tanning, notify the IRS by checking the “Final Return” box on Form 720.
The 10% tanning excise tax is a federal requirement for businesses offering indoor UV tanning services. Staying compliant means correctly collecting, reporting, and filing Form 720 every quarter. By following this guide, you can avoid IRS penalties and ensure smooth tax filings.
For the latest updates, always check the IRS website or consult a tax professional to ensure compliance.
Need Help Filing? Consider using an IRS-approved Form 720 e-filing service for a fast and hassle-free process!
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