Friday, August 12, 2011

Are you a fan of tans?

If you enjoy indoor tanning, but you’re not too fond of the 10-percent indoor tanning excise tax imposed by the Patient Protection and Affordable Care Act (ACA), you have an opportunity to be heard.

The IRS has scheduled a public hearing on proposed regulations providing guidance on the tanning tax. The hearing will be held on Tuesday, October 11, 2011, at 10:00 a.m. in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue NW., Washington, D.C. 20224.

Regulations on the tanning tax. Last summer, the IRS issued temporary and proposed regulations to implement the indoor tanning excise tax. The tax applies to amounts paid after June 30, 2010 for qualified indoor tanning services.

An indoor tanning service is a service employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.

The excise tax is imposed on the total amount paid by an individual for indoor tanning services, including any amount paid by insurance. Liability for the tax is imposed at the time of payment for any indoor tanning service. Generally, the individual who pays for the indoor tanning service is deemed to be the person on whom the service is performed for purposes of collecting the tax.

The business receiving a payment for an indoor tanning service must collect and pay over the tax. If the recipient of the indoor tanning service fails to pay the tax or the provider fails to collect the tax, the provider of the indoor tanning service must pay the tax. Full payment is due at the time the provider timely files Form 720, Quarterly Federal Excise Tax Return.

Exemptions from the tax. Certain medical procedures are exempt from the excise tax. These include phototherapy service for the treatment of dermatological conditions; sleep disorders, seasonal affective disorder or other psychiatric disorders; neonatal jaundice; wound healing; and other qualified procedures.

Fitness centers with tanning services. A membership fee to a qualified physical fitness facility may include indoor tanning services in conjunction with other services. In this case, the indoor tanning service is treated as incident to the physical fitness facility’s predominant business and no liability for the excise tax attaches.

Spray tan, anyone? Just so you know – the tax does not apply to spray tans purchased at tanning salons. I think your dermatologist would agree this is a better option than subjecting your skin to a tanning bed.


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