The 10% federal tanning tax: who pays, what is exempt, and how to file Form 720

The short answer: 10% of what the client pays for UV tanning

The federal tanning tax is an excise of 10 percent of the amount paid for an indoor tanning service, "whether paid by insurance or otherwise." It is section 5000B of the Internal Revenue Code, enacted in the Affordable Care Act, and it applies to services performed on or after July 1, 2010. The official text of the Code, current to September 28, 2026, still sets it at 10 percent.

An indoor tanning service is one that uses an electronic product with one or more ultraviolet lamps, at wavelengths between 200 and 400 nanometers, to tan the skin. That covers UV beds and booths. It does not cover spray tans, lotions, or phototherapy performed by, and on the premises of, a licensed medical professional.

The excise is a federal tax that you report to the IRS. It is separate from any state or local sales tax, which has its own rules and its own return. State licensing, age limits and other salon rules are covered in tanning laws by state.

Who pays, who collects, and who is liable

The law puts the tax on the client and the paperwork on the salon. The person who pays for the tanning owes the tax. Every business that receives a payment for indoor tanning must collect the tax from that person when they pay and send it to the IRS each quarter.

If the tax is not collected when the client pays, the salon owes it. The Form 720 instructions say that if the tax isn't collected for any reason, the collector is liable. Being a tax-exempt organization does not change this. The IRS says a tax-exempt university that covers tanning in a student activity fee must still collect and pay the tax.

The person who pays counts as the client. If someone buys a tanning package as a gift for a friend, the buyer owes the tax at the time of purchase.

Collected tax is not the salon's money. If tanning tax is collected but not paid to the Treasury, or is willfully not collected, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid tax. It can be imposed on each person the IRS finds was responsible for collecting and paying over the tax and acted willfully. That can include an officer or employee of a corporation, a partner, an accountant, or anyone who signs the business's checks.

What is taxed and what is not

These rules come from the Treasury regulation, 26 CFR 49.5000B-1, and the IRS questions and answers on the tax.

The gym exemption is narrow. The facility's main business must be exercise and fitness, tanning cannot be a substantial part of it, and it cannot sell tanning to the public for a fee or charge members differently based on tanning access. A salon that sells tanning memberships does not qualify.

Tax added on top, or already in the price

You can price either way, but the receipt decides how the IRS reads the sale. If the tax is not stated separately, the amount paid is presumed to include it. The regulation's own example uses a $15.00 tan.

When the tax is not stated separately, the IRS finds it by multiplying the amount charged by 0.09091. The IRS uses the same method when a salon forgot to collect the tax: the amount charged is treated as including it.

When one price covers tanning and something else, the tax falls only on the part reasonably attributable to tanning. The regulation gives a ratio for this, based on what you charge for each part on its own. Tanning tax on bundles and gym memberships walks through the formula, and tanning membership pricing covers setting tax-included prices.

What to do at the front desk

1. Charge the excise on every payment for UV tanning when the client pays: sessions, packages, memberships, joining fees and freeze fees.
2. Show the tanning tax as its own line on the receipt, apart from sales tax.
3. Ring up spray tans, lotions and eyewear as separate lines at their normal prices, with no tanning tax on them.
4. Sell general gift certificates without the tanning tax. When a client spends one on UV tanning, collect the tax then, either from the certificate balance or in cash.
5. Count voucher sales from online deal sites. The tax applies only to the part of the voucher price paid to you for tanning. Unless the voucher states the tax separately, that part is presumed to include it, and the IRS says the tax is owed even if the voucher is never redeemed.
6. Collect the tax at payment even if the client expects an insurer to reimburse them later.
7. Keep records that show your tanning revenue and the exact amounts of anything sold alongside it, plus a copy of each return. The Form 720 instructions say to keep records that support a claim or an exemption for at least 4 years from the latest of the date the tax became due, the date you paid it, or the date you filed a claim.
8. At the end of each quarter, total the tanning tax you collected, and any you should have collected but didn't, for Form 720.

For what else belongs in your files, see tanning salon recordkeeping. For spray booths, see spray tan DHA safety.

How to file Form 720 for the tanning tax

The tanning tax is reported on Form 720, the Quarterly Federal Excise Tax Return. If it is the only excise tax you owe, the IRS indoor tanning tax center lists three steps.

1. Fill in your business name, address and employer identification number (EIN) at the top of the form. If you don't have an EIN, get one before you file your first Form 720. You can apply online.
2. Enter the quarter's tanning tax in Part II on the line for IRS No. 140. The Form 720 instructions say this amount is the tax collected, or due for failing to collect it, for the quarter.
3. Sign and date the form, and pay the tax with it.

If a due date falls on a Saturday, Sunday or legal holiday, you may file on the next business day. October 31, 2026 is a Saturday, so the return for July to September 2026 may be filed on Monday, November 2, 2026.

No deposits are required for the tanning tax. You pay the full quarter with a timely return. You can e-file through an IRS-approved Form 720 provider and pay electronically, for example through EFTPS. On paper, you mail the return, with a check or money order payable to "United States Treasury" and the Form 720-V voucher, to the Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0009.

Once you have been responsible for collecting the tax in any quarter, you must file Form 720 for every later quarter until you file a final return, even in a quarter with no tax to report. File a final return if you go out of business or will no longer owe Form 720 taxes. Corrections to an earlier quarter go on Form 720-X, not on the next Form 720. If each of your salons has its own EIN, each one files its own Form 720. The IRS also warns of penalties for filing or paying late and for anyone who intentionally fails to collect and pay the tax.

Is the tanning tax being repealed?

Not as of September 29, 2026. Section 5000B is still in the official text of the Code, current to September 28, 2026, and the IRS still gives Form 720 instructions for IRS No. 140 in its June 2026 revision. The 2025 budget law that the IRS calls the One Big Beautiful Bill Act, Public Law 119-21 of July 4, 2025, made no change to the tanning tax.

Two bills in the current Congress, both called the Tanning Tax Repeal Act of 2025, would repeal it. H.R. 1940 was introduced on March 6, 2025 and referred to the House Committee on Ways and Means. S. 1865 was introduced on May 22, 2025 and referred to the Senate Committee on Finance. The official bill status records, last updated April 9, 2026 for H.R. 1940 and December 5, 2025 for S. 1865, show no action on either bill after referral. As introduced, H.R. 1940 would end the tax only for services performed after the day it became law. Until a repeal is enacted, keep collecting and filing.

Where TanVision fits

In TanVision, each UV tanning package and membership can carry its own excise rate beside its sales tax rate, set to be added on top of the price or already included in it. The two taxes are worked out line by line and never merged. The receipt prints the excise on its own line, the day sheet shows the day's excise, and the Tax audit report lists every excise line in its own section with a total. Run it for the quarter, and that total is your starting figure for IRS No. 140.

You set the rates; the software does not look them up. Leave the excise empty on spray tan items, and retail products never carry it. Gift certificates carry no tax when sold, and the excise is charged on the tanning package one later pays for. TanVision does not file Form 720, and it does not split a bundled price between tanning and retail. A single walk-in visit in a UV room carries the excise only once you switch on Tanning tax on walk-ins in the sales tax settings, so set that before your first walk-in. See tax and excise, or book a demo to see the Tax audit report built from your own price list.