Tanning tax on packages, bundles and gym memberships

The short answer

Federal law puts a tax of 10% on the amount paid for indoor UV tanning, "whether paid by insurance or otherwise" (26 U.S.C. 5000B). The detail on packages, bundles and gyms is in the Treasury regulation, 26 CFR 49.5000B-1, which applies to amounts paid on or after June 11, 2013.

• Packages and memberships are taxed on the total amount paid, at the time of payment. Joining fees and fees to freeze a membership count as payments for tanning.
• Other goods on the same ticket, such as lotion or eyewear, stay out of the tax if their charges are separable, no higher than fair market value, and recorded in exact amounts.
• When tanning is sold with other goods or services for one price, only the part "reasonably attributable" to tanning is taxed. The regulation gives a price ratio for finding it.
• Memberships at a qualified physical fitness facility that include tanning are not taxed, but only if the facility passes all three tests in the regulation.
• Spray tans, topical creams and lotions are not subject to the tax, and neither is phototherapy performed by a licensed medical professional on their own premises.

Packages, memberships and the fees around them

The tax is imposed on "the total amount paid for indoor tanning services, including any amount paid by insurance" (paragraph (d)(1)(i)), and it is imposed at the time of payment (paragraph (b)(1)). A session pack or an unlimited month is taxed when the client pays for it, not session by session as it is used. The IRS says membership fees paid to a tanning provider are taxed "even if a member does not use any indoor tanning services during the period to which the fee relates."

The fees around a membership count too. Under paragraph (d)(1)(iv), fees for "starting, joining, registering, enrolling, and similar fees" paid to join a monthly or other periodic tanning membership are amounts paid for tanning. So are amounts paid to "temporarily suspend" one. At the desk, that means the sign-up fee and the freeze fee.

If the ticket does not show the tax separately, the price is presumed to include it. The IRS tells providers to multiply such an amount by 0.09091 to find the tax, so a $15.00 session with the tax inside carries $1.36 of it.

Tanning sold with lotion or other goods

The regulation's list of "other goods and services" (paragraph (c)(2)) includes lotions, protective eyewear, towels, spa treatments and access to exercise facilities, among others. How you charge for them decides which of two rules applies.

The first rule covers separately stated charges (paragraph (d)(2)). You can leave the other items out of the taxable amount if the charges for them:

1. "Are separable (regardless of the manner of invoicing the charges)";
2. "Do not exceed the fair market value of such other goods and services"; and
3. "Are shown in the exact amounts in the provider's records pertaining to the indoor tanning services charge."

The regulation's own example is a $15.00 session and a $2.00 pair of eyewear on one $17.00 invoice, with the eyewear shown separately. The tax is figured on the $15.00 only, so at 10% it is $1.50. Watch the fair market value limit: if lotion in a deal is charged at more than its fair market value, so that less of the ticket counts as tanning, the second condition fails and the bundle rule applies instead.

The second rule covers bundles (paragraph (d)(3)) and applies whenever the first does not. It reaches tanning "(whether of a specified or unlimited amount, including 'free' or reduced-rate indoor tanning services)" sold with other goods and services for one price. The tax then applies to "that portion of the amount paid to the provider that is reasonably attributable to indoor tanning services." A free tan inside a bundle is still taxed this way, through its share of the price.

How to work out the tanning share of a bundle

The regulation's method (paragraph (d)(3)(i)): apply to the total amount paid a ratio comparing (A) "the provider's charge for indoor tanning services not in bundled services" to (B) that charge "plus the provider's charge for the other goods and services in the bundled services."

In plain terms: taxable amount = bundle price × (tanning price when sold alone ÷ (tanning price when sold alone + the other items' prices when sold alone)). The tax is 10% of the taxable amount.

If you only ever sell tanning or the other item inside the bundle, use its fair market value instead, "based on the amount charged by comparable providers in the same geographic area." The regulation also allows any other method the IRS publishes in the Internal Revenue Bulletin. The IRS FAQ on the tax, last reviewed or updated November 24, 2025, describes only the ratio.

When the rule was finalized in 2013, commenters told Treasury that providers had to work bundles out by hand, which they called time consuming, expensive and prone to error. The final regulation kept the method with minor clarifications (T.D. 9621).

Gyms and the qualified physical fitness facility exemption

Under paragraph (d)(4), no part of a payment to a qualified physical fitness facility that includes access to tanning is treated as a payment for tanning. A facility qualifies only if it meets all three tests in paragraph (c)(5):

1. Its predominant business is "providing equipment and services to its members for purposes of exercise and physical fitness." That is judged on all the facts and circumstances, such as the cost of the equipment, the variety of services, what customers actually use, the revenue from each service and how it holds itself out to the public, through advertising or otherwise.
2. "Providing indoor tanning services is not a substantial part of the business or activity."
3. It "does not sell indoor tanning services for a fee to the public or otherwise offer different pricing options to its members based in whole or in part on access to indoor tanning services."

The regulation's Example 7 is a full-service gym with fitness classes, treadmills, bikes, weights and two tanning beds. It charges no fee for tanning, does not sell tanning on its own and has no membership tier that differs by tanning access. No part of its members' fees is taxed. Any of these fails the third test:

• a higher-priced membership level that adds tanning;
• a tanning add-on fee;
• selling tanning sessions to people who are not members.

The exemption comes from the regulation, not the statute. When the rule was finalized, commenters pointed out that section 5000B contains no gym exception. Treasury kept it anyway: tanning is incidental at such a facility, and making it split monthly fees between tanning and everything else "would be burdensome and difficult to administer" (T.D. 9621).

A gym that fails any test is an ordinary tanning provider. Its memberships that include tanning are bundles, so it works out the tanning share of each payment, for example with the ratio above, and files Form 720 like a salon.

What to do at the front desk

1. Set a standalone price for every tanning item and every add-on you bundle. Those prices feed the ratio. Without them, you have to estimate fair market value from what nearby providers charge.
2. Ring lotion, eyewear and other retail as their own lines whenever you can, at no more than their fair market value. Separately stated charges keep the excise on the tanning line only.
3. Show the tanning tax as its own line on the receipt, or the price is presumed to include it.
4. Collect the excise on joining fees and freeze fees for tanning memberships, not only on the monthly dues.
5. For every bundle sold at one price, keep a worksheet with the standalone prices, the ratio, the taxable amount and the tax. The Form 720 instructions say to keep records of all transactions that show the correct tax was paid, and to keep records supporting exemptions 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.
6. Do not charge the excise when you sell a gift certificate that can be spent on tanning or on other things. Collect it when the certificate is redeemed for tanning. A tanning-only voucher is different: in the IRS's example, one sold through an online deal site, the salon collects the tax when it receives its payment and must pay it over even if the voucher is never redeemed.
7. Tax promotions on what the client actually pays, as in the table above.
8. Report the quarter's total on Form 720, Part II, on the line for IRS No. 140. The tanning excise tax guide covers due dates and payment, and tanning salon recordkeeping covers the other records to keep.
9. Treat the excise as money held for the government. Under the Form 720 instructions, tax collected but not paid over, or willfully not collected, can bring the trust fund recovery penalty (the full unpaid tax) on the responsible people who acted willfully.

State sales tax is a separate question. The federal regulation does not decide whether your state taxes a tanning package or the lotion in it, so check with your state's revenue department. For state rules on ages, consent and records, see tanning laws by state. For the business side of pricing a bundle, see tanning membership pricing.

Where TanVision fits

In TanVision, each tanning package and membership can carry its own excise rate beside its sales tax, with a box to mark the excise as already inside the price. The salon sets each rate; the software does not decide what is taxable. Retail products such as lotion carry no excise rate. Put a package and a bottle on one ticket as two lines, and the excise stays on the tanning line. The receipt prints the excise on its own line, and discounts come off before tax. The Tax audit report lists every excise line in a section of its own, with its base, rate and ticket.

TanVision does not split a single bundled price for you. If you sell one, work out the tanning share with the ratio above and keep the worksheet. Gift certificates carry no tax when sold, and the excise falls on the tanning item they are spent on. Book a demo to see the Tax audit report.