Online vs Paper Filing for the Tanning Excise Tax: Pros & Cons
- Online vs paper filing defines how quickly your Form 720 is processed and accepted by the IRS.
- Choosing the right method reduces the risk of errors, penalties, and delayed compliance.
- Electronic submission offers faster confirmation and stronger recordkeeping controls.
- Paper submission remains permissible but involves longer timelines and manual handling.
- Businesses prioritizing efficiency and accuracy generally benefit more from digital filing.
If a company is in the business of providing tanning services to consumers, it must collect Tanning Excise Tax and remit it to the IRS. The excise tax is assessed at a rate of 10% of the amount paid for tanning services.
Each method has advantages over the other. Electronic submissions will typically result in quicker processing than traditional paper submissions; additionally, electronic submissions provide greater ease of recordkeeping and less chance of errors when compared to paper submissions.
This blog post explains both filing options in detail so that you can decide which filing option would benefit your business.
ALSO CHECK - What Is the Indoor Tanning Tax & How to File It Online
What is the Tanning Excise Tax?
A federal tax under the Affordable Care Act, this applies to the amount paid for services that use UV light for indoor tanning.
Some key points about the tax:
- The tax is 10% of the amount charged for indoor tanning services
- The service provider is liable for collecting and paying the tax
- The tax must be reported quarterly using the IRS Form 720
- Even if the tax is not due for that particular quarter, it must still be filed.
Note: This tax is separate from income tax or sales tax and falls under federal excise tax regulations.
Filing the Tanning tax
There are two options to file the tanning tax: online and paper filing.
Understanding online vs paper filing helps you make a better-informed choice!
What is paper filing?
Paper filing involves manually completing Form 720, printing it, and mailing it to the IRS along with your payment.
How to go about it?
- Download the Form 720 from the website
- Manually fill in your tanning excise tax amounts
- Attach payment, or pay separately
- Mail the return to the IRS processing center
Pros of paper filing
- There is no need for specialized software
- For traditional filers, the process is familiar
- No e-file provider fees are incurred
Cons of paper filing
- Slower IRS processing times
- No immediate confirmation of receipt
- Higher risk of manual errors
- Returns might be delayed or lost in transit
Paper filing has been the traditional way, and businesses often choose it out of habit rather than choosing it for efficiency.
What is online filing?
Online filing is the process of submitting the tax through an IRS-approved eFile provider. The IRS strongly encourages e-filing for submitting returns.
How it works
- Use an approved excise tax software or filing service
- Enter the tanning excise data digitally
- Submit the Form 720 online
- Receive acknowledgment from the IRS shortly after submission
Pros of online filing
- Quicker processing by the IRS
- Immediate confirmation as well as acknowledgement
- Built-in error checks help in more accurate filing
- Creates a digital record for recordkeeping and audits
- Easier to correct if the return is rejected
Cons of online filing
- Requires basic technical familiarity
- Might involve a service or software fee
Comparing online vs paper filing, though, e-filing is more accurate and reliable.
ALSO CHECK - 5 Common Tanning Tax Filing Mistakes and How to Avoid Them
Final Thoughts
Paper filing is still allowed, but online filing helps in quicker processing, fewer errors, and better recordkeeping. Understanding your filing options helps you make a choice that would serve your business best!
Simplify your Tanning Excise Tax compliance with efile720, an IRS-authorized platform designed for fast, accurate Form 720 filing.
FAQs
1. Is online vs paper filing equally accepted by the IRS for the tanning excise tax?
- Yes, e-filing and paper filing of Form 720 are both permitted by the IRS, though the IRS strongly encourages the use of electronic submission because of the efficiency and accuracy benefits associated with electronic filing.
2. Can I still use online vs paper filing if no tanning tax is due for the quarter?
- Yes, quarterly Form 720 filings must be made regardless of any calculated tax liability.
3. Does online vs paper filing affect how quickly my payment is applied?
- Yes, e-filed returns are processed and payments applied faster than returns submitted by mail.
4. Are penalties different for online vs paper filing errors?
- No, there is no difference between the penalties assessed for errors on e-filed vs paper-filed returns. Penalties are calculated based on accuracy and timeliness, not on the filing method used.
5. Should small tanning businesses consider online vs paper filing?
- Yes, even small tanning operations benefit from faster confirmation, improved accuracy, and better tracking of compliance deadlines made possible through electronic filing.