Texas Indoor Tanning Tax Filing Guide with Simple720

The federal excise tax on indoor tanning services (sometimes called the “tanning tax”) was introduced under the Patient Protection and Affordable Care Act.

Here are the important points:

• The tax is 10 % of the amount paid for indoor tanning services (those using UV lamps) see line for IRS No. 140 on Form 720.

• “Indoor tanning services” means a service employing any electronic product with UV lamps (wavelengths 200–400 nm) to induce skin tanning.

• The provider of the service must collect the tax from the customer at the time payment is made. If the tax isn’t collected, the provider becomes liable.

• There are exemptions: for example, spray-on tans and topical creams/lotions are not subject to the tax. Phototherapy services performed by a licensed medical professional (on their premises) are also exempt.

Even though you’re operating in Texas, the tanning tax is a federal excise tax, not a Texas-state tax. Here are key state‐local considerations:

• If you provide indoor tanning services in Texas and collect payment, you must comply with the federal rules described above.

• Texas does not impose a separate state excise tax for indoor tanning services under this federal category (though you’ll still have to follow Texas sales tax or local licensing rules if applicable).

• Use the federal filing guidelines (Form 720, IRS No. 140) for the tanning tax. The state of Texas role is limited in this context; you file federally.

• Even if your business is in Texas and you have a Texas EIN or Texas location, the excise tax is collected and remitted to the IRS (not the Texas comptroller).

• Be sure your bookkeeping separates the amounts subject to the tanning tax vs other non-taxable services (e.g., spray tans, lotion services) so you only charge/collect the tax on the correct portion. The federal regulations have strict rules. 

So, for Texas‐based tanning salons and gyms: collect 10% on UV‐lamp indoor tanning services, report it quarterly via Form 720 to IRS, keep your records.

• Mixing services: If you offer spray tans or lotions (which are exempt) alongside UV‐lamp tanning, be careful not to include exempt revenue in your tax base. The rules under 26 CFR 49.5000B-1 specify how to handle bundled services.

• Missing the quarterly deadline: Filing deadlines are strict (Apr 30 / Jul 31 / Oct 31 / Jan 31). Late filing or payment can trigger penalties.

• Incorrect tax calculation: The tax is 10% of the amount paid for indoor tanning services and not simply 10% of all salon receipts. Only the UV lamp tanning portion. 

• Inadequate records: Without separated records of taxable vs non-taxable services, the IRS may challenge your allocation.

• Thinking it’s a state tax: This is a federal excise tax; don’t confuse it with Texas state or local taxes.

• Free or promotional sessions: If no payment is made, the tax does not apply. But if a fee is charged or bundled, the portion attributable to tanning may be taxable.

Step 1 - Create an Account: If you’re a new user, sign up for a free Simple720 account. Existing users can log in with their credentials.

Step 2 - Provide Business Details: For new users, the next step is to enter your business details. Click on “Add New Filings” and click on “Add New Business” and complete the required fields, including:

• Business Name

• Employer Identification Number (EIN)

• Business Type (select from the drop-down options)

• Business Contact Information

If you’re an existing user, simply select the stored business name from the database.

Step 3 - Choose Form Type: Select “Form 720 (Quarterly Federal Excise Tax)” as the form type. Accurately provide the tax year and quarter you are filing for, then click “Proceed.”

Step 4 - Select Indoor Tanning Excise Tax: Please navigate to the Part 2 tab, select Indoor Tanning Services (140) from the available options, and then click Save to confirm your selection. Once saved, proceed to the next step for further processing.

Step 5 - Enter Filing Information: Please enter the sales price for your indoor tanning service in the designated field. This is the amount your customer paid for the tanning session, excluding any exempt services.

Step 6 – Auto Calculation: The tax amount is automatically calculated and displayed on the online 720  portal.

Step 7 - Choose a Payment Method: Review your information and choose one of the IRS payment methods:

• Electronic Funds Withdrawal (Direct Debit)

• EFTPS - Electronic Federal Tax Payment System

Step 8 - Complete Your Filing: Once the payment is completed, your Indoor tanning tax filing will be submitted within minutes.

You’ll receive instant confirmation as soon as the IRS approves. No more waiting weeks for updates.

Conclusion

If you own a tanning salon or a gym in Texas that offers indoor tanning services, you have a federal excise tax obligation: collect 10% tax on the amount paid for those services, file quarterly on Form 720 (IRS No. 140), and remit it to the IRS. Using the Simple720 Online portal simplifies this process from account setup, business entry, category selection, tax calculation, payment and submission.

Stay vigilant about proper record-keeping, separation of taxable vs exempt services, and meeting filing deadlines. By taking care of the federal tanning tax with this process, you’ll remain compliant and free to focus on your core business operations. The IRS now requires Form 720 to be filed electronically.