Nine Tips on the 10 Percent Tax on Tanning Services
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.
Links:
YouTube Video:
Tanning Services Excise Tax:
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