Simplified Tax Guide for Indoor Tanning Service Providers - Efile720
Indoor tanning services incur a mandatory 10% federal excise tax reported quarterly via Form 720.
Any business offering UV-based tanning must file quarterly, even with zero tanning revenue reported.
Only UV tanning is taxable; spray tanning, red-light therapy and product sales are exempt.
Filing Tanning tax online through IRS-authorized platforms simplifies reporting, accuracy and quarterly compliance.
Maintain clear tanning revenue records, allocate bundled services correctly and file before strict quarterly deadlines.
Introduction
The Indoor Tanning Tax, is a 10% excise tax on all income derived from Indoor Tanning.
Many owners of new Salons and Fitness Centres overlook this requirement because it is not directly associated with income taxes that they must submit.
The Excise Tax is a Federal excise tax under the Internal Revenue Code at 26 U.S.C. 5000B.
The Excise Tax is paid to the Federal Government each time a consumer uses UV (ultraviolet) rays for tanning services.
To file quarterly returns, a tax payer must file Form 720. A tax payer must file Form 720 within seventy-five days of the end of the quarter.
Why is it important to comply with Quarterly Deadlines?
Deadlines for filing quarterly Taxes are rigid. Even if a taxpayer had no income from Indoor Tanning during a given quarter, failure to file returns for that quarter can lead to penalties.
Filing everything correctly provides evidence of a tax payer's documentation, which is used in establishing your tax liabilities when paying Income Taxes.
This guide outlines the main points needed to complete taxes on Indoor Tanning for new business owners who are just establishing themselves, but have no prior experience with excise taxes.
Form 720
Form 720 must be filed by business owners who provide indoor tanning services using ultraviolet radiation in the United States. The Internal Revenue Service (IRS) mandates the filing of Form 720 by all businesses that provide ultraviolet indoor tanning, regardless of the size of the business and the revenue generated by that business.
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Who must file Form 720?
Any company providing indoor tanning services using Ultraviolet (UV) radiation, including:
Tanning Salons that charge for tanning sessions and/or memberships for tanning.
Gyms, spas, wellness centers and beauty salons that utilize ultraviolet radiation in an equipment booth.
Independent salon operators renting the tanning booths and charging for use.
Fitness centres that include a tanning option as part of membership programs that are identified as a premium membership.
Who does not need to file Form 720?
Businesses that offer services using airbrush or spray tanning only.
Businesses that sell products including lotions, skincare and non-UV equipment.
Gyms that maintain regular membership services without offering access to tanning.
Operators that provide red light or LED services that do not involve UV exposure.
Many owners learn late that IRS taxes for tanning businesses follow a strict guideline. If customers are paying for UV tanning, then the business must report it.
What services qualify for tax on indoor tanning?
Taxable UV Services:
The use of a tanning booth or tanning bed is taxable.
The use of a tanning bed as part of a package deal, promotional deal or monthly pass.
Unlimited use of tanning booths, where UV usage is included in the membership.
Not Taxable Services:
Spray tanning or the use of airbrush tanning.
Non-UV services such as saunas, facials and massages.
Services using red light or LED light without exposure to UV rays.
Sales of retail items that do not involve tanning.
Bundled Services and Excise Tax: The excise tax only applies to the tanning portion of the service being offered. The tanning business must assign an appropriate value to the UV portion.
Determining the Recommended Ways to File Tanning Tax
A. Paper Filing Method (Manual Filing)
To complete the paper filing method, you will need to obtain IRS Form 720 from the IRS website. This will allow you to fill out Part II of the form and put in your UV tanning tax in Box 140. You must mail the form with your check or money order along with your EIN (Employer Identification Number) and the tax period.
B. Digital Filing Method (The Preferred Choice)
Digital filing has now become the primary method of filing due to its ability to provide quick and accurate filings.
How to File your Tanning Tax Online
The first step to filing online is to gather your total revenues from the tanning business for the quarter.
Once you have that information, you need to log into an authorized e-file provider on IRS's website.
Once logged in, you will need to fill out your business details, EIN (Employer Identification Number) and the quarter in which you are filing.
You will then enter your UV tanning tax into the appropriate box and submit your filing. After submission, you will receive an electronic confirmation immediately.
Advantages of the Online Filing Method:
Eliminates the delay from mailing your returns.
Reduces the amount of mistakes that can occur during data entry.
You can save and access previous returns for reference.
The quicker turnaround time for processing taxes for tanning salons.
Common Mistakes
The following are common mistakes made by operators in the compliance reporting space:
The Mistake of Not Filing Form 720 in Low or Zero-Income Quarters.
Adding Non-UV Services to Your Taxable Revenue.
Miscalculating the Number of Tanning Segments Allocated to Bundled Package Sales.
Filing in the Wrong IRS Category Number(s).
Estimating Transactions Instead of Pulling Actual Transaction Totals for Your Quarterly Files.
Forgetting to Track Pre-Paid and Discounted Packages for Tanning.
Missing Quarterly Due Dates Due to Mailing Delays.
Not Separating Tanning Revenue from General Business Revenue.
Ignoring IRS Correspondence and Corresponding Reported Figures That Are Not Match.
Best Practice for Compliance
Best practices help avoid inaccuracies and mistakes when filing tanning service taxes quarterly. Examples of best practices include:
Have a Separate Ledger for Indoor Tanning Service Revenue.
Having Clear Pricing Structures for Bundled Packaging.
Keeping All Invoices, Membership Logs and Session Records.
Have Automated Reminders Set Before Each Filing Due Date.
Utilizing an E-Filing Platform to Tag All Submitted Returns and Proofs.
Keeping Up To Date on IRS Releases and Changes Related to Tanning Business Tax Reporting.
As the popularity of e-filing continues to grow, businesses have begun to rely heavily on secure online portals that complete Tanning tax online submissions.
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Final Thoughts
Accuracy and timeliness of quarterly reporting will protect your salon, fitness center, spa or other type of business against fines and allow you to run your business seamlessly.
By filing your return through a third-party provider authorized by the IRS, you can focus on providing quality services to your clients instead of wasting time on tax paperwork.
This focus on compliance and ease is central to effective IRS taxes for tanning businesses.
Frequently Asked Questions
1. Is the 10% tanning tax applicable to all indoor tanning businesses?
Yes, all businesses that provide UV-based indoor tanning must file Form 720 each quarter.
2. Am I required to file Form 720 if I do not earn any revenue from my indoor tanning services?
Yes. You must file a zero return for compliance purposes.
3. Are red light therapy or spray tan services subject to the 10% indoor tanning excise tax?
No. The indoor tanning excise tax is only imposed on UV-based tanning services.
4. Can I file my Form 720 electronically using an online e-filing service?
Yes, you may submit your Form 720 to the IRS through any approved e-filing service provider.
5. What type of records do I need to maintain?
You should maintain records of your revenue, membership details, package breakdown and receipts from each quarterly filing, including clear separations required in tax filing for tanning services.