Starting July 1, 2010, many businesses offering tanning services must collect a 10 percent excise tax on the tanning services they provide. This excise tax requirement is part of the Affordable Care Act that was enacted in March 2010.
Here are nine tips on the tanning excise tax that providers must collect.
1. Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.
2. If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.
3. The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.
4. The tax does not apply to spray-on tanning services.
5. 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.
6. 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.
7. 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.
8. Tanning service providers must report and pay the excise tax on a quarterly basis.
9. To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.
Find more information about the excise tax on tanning services, IRS Form 720 and other tax provisions of the Affordable Care Act at IRS.gov.