How to handle federal excise tax on the tanning services?
The tanning service is an artificial skin beautification and The Internal Revenue Services has issued a notification to collect a 10 percent federal excise tax on the tanning services which salons and other related niche provide.
Described under the guidelines which a taxpayer follows to collect federal excise tax from beauticians.
Ten percent federal excise tax will be collected from client at the time vendor provide tanning services.
The tanning provider will pay federal excise tax to the taxing agency if the customer does not pay or it was not collected by the customer.
This federal tax is not applicable to photo therapy service provided by a licensed medical professional.
Ten percent federal excise tax is not applied to spray tanning services.
The federal excise tax should be properly extracted while calculating such as If payment covers tanning service charges along with other goods and services, the other goods and services may be excluded from the excise tax if they are individually stated and the charges do not exceed the fair market value for those other goods and services.
If the customer buys in bulk and the charges are not identified separately, the excise tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.
The federal excise tax is not applied on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separate distinguishable fee.
Generally tanning service providers pay tax on a quarterly basis unless notified by the taxing authorities.
Instructions to file taxes on tanning services:
Businesses file Quarterly Federal Excise Tax Return by using an Employer Identification Number which is assigned by the Internal Revenue Service.
An employer identification number is applied electronically to get instantly if a business does not have one to pay tax on tanning service.
IRS form 720 is used to file excise tax on the tanning services.
