In 2010, the U.S. government instituted a new excise tax that applied only to establishments that provide indoor tanning. This additional charge, called the Indoor Tanning Services Excise Tax, took effect on July 1, 2010, and was part of a government program to increase revenue and discourage the practice of indoor tanning, which has been shown to pose substantial health risks. Establishments that offer indoor tanning are now required to submit a 10 percent tax based on their revenues from their businesses. 

What is the Indoor Tanning Services Excise Tax?

The Indoor Tanning Services Excise Tax is a flat 10 percent tax that is imposed on all revenues from indoor tanning. In most cases, the IRS imposes this tax on establishments that primarily earn revenue from offering tanning services through the use of tanning beds. Companies that offer spray-on tanning services or tanning lotion applications that are offered by trained medical personnel are exempt from this tax. The provisions of this tax do not apply to fitness centers that provide tanning as part of the available amenities without charging an additional fee.

Collecting the Excise Tax

Rather than having to pay the taxes out of their own pockets, the IRS stipulates that tanning salons must receive the tax from customers at the time tanning services are rendered. As a result, some tanning salon owners may opt to increase their prices by 10 percent to collect the tax at the time of the transaction. There is no legal requirement that owners stipulate that customers must pay additional 10 percent tax in addition to their typical service fees.

Submitting the Indoor Tanning Services Excise Tax

While the IRS requires that tanning business owners collect the taxes from their customers on a regular basis, they are only liable for submitting the tax once every quarter. To submit the tax, entrepreneurs must complete Form 720 "Quarterly Federal Excise Tax Return" and enter the amount of their tax on page two. They can easily calculate the amount of their tax by multiplying their quarterly revenue by 10 percent. According to the tax code, the tanning excise tax should be submitted in April for the first quarter, July for the second quarter, October for the third quarter, and the following January for the fourth quarter.

Businesses that primarily offer indoor tanning through the use of tanning beds should familiarize themselves with the provisions of the Indoor Tanning Services Excise Tax. By learning about the tax and by getting professional help to submit their taxes, these business owners can ensure that they remain in compliance with IRS regulations.