Blog Details

Revising all the tricks and techniques of salon management, you need to be quite sure about business operations and regulatory compliance. Specifically, for salon owners that offer services such as indoor tanning, it involves this tax form, 720, the Quarterly Federal Excise Tax Return. This article explains the connection between indoor tanning services and the taxes required by the IRS. We will highlight the important matters salons need to understand so that they are on the right side of the law when they provide a valuable service to the public.

Indoor tanning is one of the most popular types of services because people want to have that sun-kissed glow the whole year round. Salons operating all over America provide indoor tanning-from basic UV-based tanning beds and booths to spray tanning. While such services can be good profit-generating businesses, they are still considered to be subject to federal excise tax. Understanding the complexities of this tax is especially critical for financial planning and avoidance of penalties. According to IRS guidelines, the next thing is to know what constitutes an indoor tanning service for taxation purposes and to ensure compliance.

Form 720 is much more than 'just another government form'; rather, it is the vehicle through which a certain number of federal excise taxes, including that on indoor tanning services, are reported and paid. It's a mandatory quarterly tax return, as with any other required by law, for those salons rendering such services. The tax is imposed on a percentage of the total fees that customers have paid for indoor tanning services. This tax applies to the service itself, not to the equipment used in the provision of that service. Salons have to track revenue streams arising from these activities in their accounts and report the same to ensure correct payments.

The failure to meet or mishandling your Form 720 might have terrible consequences, such as turning to huge penalties and payment of interest. It is proactive that one adopts compliance. This is activated from a good record of every indoor tanning service sold, knowledge of the tax rate, and submitting the form and payments on time every quarter. It is also a good practice to consult a tax professional who has experience with excise taxes so that the salon is completely compliant. Prioritizing these financial obligations ensures that the salon safeguards itself while creating a culture of integrity and professionalism.