Q. Who must pay the indoor tanning services tax?
A. Indoor tanning service providers are responsible for collecting the tax from the person paying for the service and in some situations, from the person receiving the service.
Q. If the tax isn’t collected from the person paying for the service, or for an undesignated payment from the person redeeming the gift card, then who is liable for the tax?
A. The person receiving the payment for the indoor tanning service (usually, the provider of the service) is liable.
Q. Who must report the tax to the government?
A. The person receiving the payment for the indoor tanning service must report the indoor tanning services tax.
Q. How do I report and pay the tax due the indoor tanning services tax?
A. Report and remit the full amount of the indoor tanning services tax on a timely-filed Form 720, Quarterly Federal Excise Tax Return. Excise tax deposits are not required for the tax on indoor tanning services.
Q. If an invoice includes other goods and services in addition to indoor tanning services, how are the non-tanning services handled?
A. The service provider doesn’t calculate tax on non-tanning services, as long as the fair market value of all goods and services are listed separately on the invoice.
Q. How do I handle a transaction (such as the sale of a gift certificate) when I can’t determine at the time of sale what, if any, portion of the gift certificate will be redeemed for an indoor tanning service?
A. Payments (such as the sale of a gift certificate) received in exchange for unspecified services aren’t subject to tax at the time of payment. When the holder of the gift certificate exchanges the gift certificate for indoor tanning services, the provider will determine and collect any tax due on the indoor tanning services.
Q. If a customer redeems a gift card but doesn’t use it for indoor tanning services, is the indoor tanning tax applicable?
A. No, the tax does not apply in this situation.
Q. If a customer purchases a gift card for indoor tanning services, pays the tax and doesn’t use the card, is the purchaser entitled to a refund of tax?
A. No, there is no provision for refunding the tax once the service for indoor tanning services is purchased.
Q. What are the requirements for keeping records for indoor tanning services?
A. As with any other tax return, the tanning service provider must maintain adequate books and records showing the amount of revenue received for indoor tanning services.