Federal Excise Tax Imposed on Tanning Service Providers effective 07/01/10
Beginning July 1, 2010, the federal Patient Protection and Affordable Care Act imposes a 10 percent federal excise tax on the sale of indoor tanning services. For purposes of the tax, “indoor tanning service” means a service employing any electronic product designed to incorporate one or more ultraviolet lamps intended for irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.
Tanning services, including the application of a temporary tan provided by any means, have been subject to New Jersey sales tax since October 1, 2006. (See N.J.S.A. 54:32B-3(b)(8)) When determining the New Jersey sales tax base on transactions where the federal excise tax is also imposed, the amount that represents the 10 percent excise tax is not included. For example:
|Tanning service charge:||$ 50.00|
|Federal Excise Tax:||5.00|
|New Jersey Sales Tax:||+ 3.50|
|Total charges to customer||$ 58.50|
Because New Jersey’s law imposes tax on a wider scope of services than federal law, as described above, at times New Jersey sales tax may be the only tax applicable to the sale of tanning services. For example, spray tanning is subject to New Jersey sales tax but is not covered within the scope of “indoor tanning service” as defined by Federal law.