Step-by-Step: How to File Your Tanning Tax with Form 720
- Calculate Your Tax Due: If your establishment offers indoor tanning services in exchange for payment, then you owe a 10% federal excise tax that is to be submitted on Form 720 every quarter.
- Collect the Tax at the Point of Sale: Collect the 10% tanning tax from your customer when he pays for his indoor tanning services.
- Form 720 Quarterly: File Form 720 every quarter, correctly completing Form 720 to report total excise taxes paid on Line No. 140 – Indoor Tanning Services Tax.
- IRS File And Pay by Due Dates: File and pay excise tax by due dates (April 30, July 31, October 31 and January 31).
- Keep Records for Compliance: Records of sales from the indoor tanning services, as well as the taxes paid, should be kept for IRS purposes.
What Is the Tanning Tax and Who Must Pay It?
The IRS charges businesses that provide indoor tanning services an excise tax of 10 percent on the fee paid for the service. The excise tax for tanning services was established under the Affordable Care Act and continues to be applicable for qualifying tanning sales.
When businesses file their income taxes quarterly to the IRS, they must file a report using Form 720, the Quarterly Federal Excise Tax Returns.
This blog will show you how to properly file your tanning taxes with Form 720 so that you can be compliant with the IRS and avoid possible penalties, including key details on filing tanning tax.
Step-by-Step Guide to Filing Your Tanning Tax with Form 720
1. Verify Your Need to File Taxes
Make sure your company activity is subject to the indoor tanning excise tax before filing:
- You charge for your indoor tanning services (per session, membership, or prepaid package).
- Payment for these services is either collected directly or through sales portals.
- You usually don't have to pay the tax if your only source of income is selling tanning lotions (without offering UV tanning sessions).
2. Obtain the Tanning Tax from clients
For indoor tanning services, collect the 10% tanning tax at the time of every transaction.
Here are some best practices:
- Displaying the tax individually on invoices or receipts.
- Applying the tax consistently to all service revenue that is subject to taxation.
| Required Information | Description |
|---|---|
| Employer Identification Number (EIN) | Your business tax ID; required to file Form 720. |
| Total Taxable Sales Amount | Total amount collected for indoor tanning services in the quarter. |
| Calculated Tanning Tax | 10% of the taxable sales for the quarter. |
| Quarter Covered | The reporting period (e.g., Jan–Mar). |
| Payment Amount and Method | Cash, check, EFTPS or electronic payment details. |
3. Complete Form 720
Follow these key sections:
- Header: Fill in your business name, address, EIN and quarter covered.
- Part I – Indoor Tanning Services Tax (Line No. 140): Enter the total 10% excise tax amount.
- Signature and Date: Sign and date the return before submission.
Whether you choose paper filing or electronic filing, ensure the completed form is accurate and legible.
4. File and Pay by the Quarterly Deadlines
IRS due dates for Form 720 tanning tax are:
| Quarter Covered | Filing Due Date |
|---|---|
| Jan – Mar | April 30 |
| Apr – Jun | July 31 |
| Jul – Sep | October 31 |
| Oct – Dec | January 31 (next year) |
If a deadline falls on a weekend or federal holiday, file by the next business day.
5. Maintain Accurate Records
Keep thorough records for at least three years, including:
- Sales receipts
- Tax collected per transaction
- Copies of filed Form 720
- Proof of payments
Good recordkeeping supports audit defense and future filings, especially for filing tanning tax processes.
ALSO CHECK - Is the Indoor Tanning Tax Still in Effect?
Conclusion
As an indoor tanning service provider, it's very important to accurately file your tanning taxes using Form 720. The IRS expects payment of the tanning tax and failure to report and pay the excise tax can lead to steep fines.
Following all the step-by-step instructions will help you confirm if you have a tanning tax obligation; collect the proper tax amounts; fill out the proper forms; and submit your payments before your quarterly deadlines. Maintaining complete records and determining the appropriate filing method will help make your tax obligations easier to manage.
Take Action Now
Need to make the process of filing tanning tax with Form 720 easier and quicker? Visit eFile720 for professional e-filing services to ensure you comply with the IRS for your quarterly.
FAQs
- What is “Filing tanning tax” with Form 720?
- Filing the tanning tax is the process of preparing and filing IRS Form 720 to report and pay the required 10% excise tax on indoor tanning services offered to customers every quarter.
- Who must file Form 720 for the tanning tax?
- If your business provides indoor tanning to customers, you must collect and file Form 720 each quarter for the excise tax.
- Can I file Form 720 online?
- You may file IRS Form 720 electronically through IRS-approved e-file software and authorized e-file vendors; e-filing will assist you in completing your tanning tax return accurately and on time, streamlining the filing tanning tax.
- What ensues if I miss a filing deadline?
- Failure to meet the deadline will result in the imposition of penalties and interest. To avoid penalties, be sure to submit your completed tanning tax return no later than April 30, July 31, October 31, or January 31.
- Are all tanning business taxes filed on Form 720?
- Failure to meet the deadline will result in the imposition of penalties and interest. To avoid penalties, be sure to submit your completed tanning tax return no later than April 30, July 31, October 31 or January 31.