Tanning Tax for Gyms and Spas
If tanning is a side service at your gym or spa, the indoor tanning excise tax can apply to you just as it does to a stand-alone salon. A gym may be fully exempt on memberships if it passes three tests. Everyone else pays 10% on the tanning part of what customers pay, and the work is in finding that part. The rules come from Regulations section 49.5000B-1, which both the Form 720 instructions and Pub. 510 point to for these situations.
The three tests for a gym
The regulation exempts payments to a "qualified physical fitness facility." If you qualify, no part of a payment that includes tanning access counts as a payment for tanning. A facility must meet all three tests:
- Fitness is the main business. The predominant business must be providing equipment and services to members for exercise and fitness. The IRS looks at the facts, such as equipment cost, variety of services, what customers actually use, revenue by service, and how you advertise.
- Tanning isn't a substantial part of the business.
- Tanning isn't sold or priced. The facility doesn't sell tanning for a fee to the public, and it doesn't offer members different pricing based in whole or in part on tanning access.
The third test is where a gym can lose the exemption through a marketing decision.
| What the gym does | Result under the third test |
|---|---|
| Two beds, open to all members, no fee, one membership price | Passes. This closely tracks the regulation's Example 7. |
| Offers a Premium tier whose extras include tanning | Fails. Pricing is based in part on tanning access. |
| Sells a $10 tanning session to members | Doesn't fit. The Example 7 gym charges no fee and doesn't offer tanning separately. |
| Lets the public buy single tanning sessions | Fails. It sells tanning for a fee to the public. |
If your tanning has its own price
For a spa or a non-qualifying gym, start with the simple case. If a payment covers tanning and other things, the other charges can be left out of the tax base when they meet all three of these conditions: they're separable, regardless of how you invoice them; they don't exceed fair market value; and they're shown in exact amounts in your records for the tanning charge.
In the regulation's example, a customer pays $15 for a tanning session and $2 for protective eyewear. Tax is figured on the $15 only. Other goods and services are defined broadly. They include eyewear, towels, lotions, manicures, pedicures, spa treatments, and access to sport or exercise facilities.
The bundle formula, with a discount built in
If you can't meet those conditions, the bundle rule applies. The tax falls on the portion of the payment reasonably attributable to tanning. The regulation's method is a ratio you apply to the amount actually paid:
The ratio is what matters when a bundle is sold at a discount. Our post on tanning tax on bundled packages shows a simple split where the parts add up to the package price. Most spa packages are priced below the sum of their parts. Here's what happens then, using made-up numbers.
Spa example. A spa sells a $300 monthly package (before tax) of unlimited tanning, facials, and sauna. Bought separately, tanning is $60 for the month and the rest is $340.
- Stand-alone total: $60 + $340 = $400.
- Ratio: $60 / $400 = 15%.
- Tanning portion: $300 x 15% = $45.00.
- Tax: $45.00 x 10% = $4.50.
Taxing the $60 stand-alone price would give $6.00, which is more than the formula produces. The regulation names this ratio, plus any other method allowed in guidance published in the Internal Revenue Bulletin, and our sources show no other method. A guessed flat percentage isn't one of them. The regulation's own Example 6 works the same way: a $1,000 spa package with $150 tanning and $900 other items comes to $142.86 of tanning.
Gym example. A gym sells Basic at $40 and a Premium tier at $60 that adds tanning. It also sells tanning to the public at $25 a month. It fails the third test, so bundle treatment applies to Premium, with no separately stated tanning charge.
- Stand-alone total: $25 + $40 = $65.
- Tanning portion: $60 x ($25 / $65) = $23.08.
- Tax: $23.08 x 10% = $2.31 per Premium member per month.
"Free" tanning inside a bundle doesn't escape this. The regulation's bundle rule specifically includes free or reduced-rate tanning. Its example, swimming lessons with two "free" tanning sessions, produces $26.81 of tanning from a $252 package.
Other situations spas run into
| Situation | Treatment under the regulation |
|---|---|
| Join fee or membership freeze fee for a plan providing tanning | Amounts paid for tanning services |
| Gift certificate usable across services | Taxed at redemption for tanning, not at sale |
| "Buy four, get the fifth free" | Tax on the four paid tans, none on the redeemed fifth |
| Light treatment for psoriasis by, and on the premises of, a licensed medical professional | Phototherapy, outside the tax |
| Cosmetic UV tanning sold at a medical spa | Not phototherapy, since phototherapy means treatment of listed conditions or others a professional determines treatable |
For more on the medical and non-UV lines, see our post on what is exempt from the tanning tax.
Reporting tanning when it's a side service
A tanning add-on makes you a Form 720 filer even if excise tax is new to you. You enter the tax for the quarter on the line for IRS No. 140 in Part II. Pub. 510 says the collector isn't required to make semimonthly deposits. The indoor tanning tax page covers how the filing itself works, and the tanning tax calculator helps once you have your taxable total.
If you passed all three fitness tests and have no other Form 720 tax, the regulation says no liability arises on those memberships, so that activity doesn't create a return. If you did owe, you can file IRS No. 140 online with EasyFile720. You enter your figures after working out your bundle share, the math is calculated for you, and validations catch common mistakes before you submit. Accounts are free to create, and it's $39.95 when you file. Keep your allocation workpapers. The instructions say to keep records for at least 4 years.
FAQ
Can a gym offer free trials and still qualify?▼
The regulation's example of a qualifying gym offers short-term or free trial memberships and lets non-members buy exercise classes. What it cannot do is sell tanning for a fee to the public or price memberships based on tanning access.
Does a small side business get a pass because tanning is incidental?▼
No. The regulation's first example is a nail salon whose tanning is incidental to its primary business, and it still calculates the tax. The incidental rule belongs to the qualified fitness facility tests only.
What if I only ever sell tanning inside a bundle?▼
The formula then uses the fair market value of similar tanning services, based on what comparable providers in the same geographic area charge. The same approach applies to other services you only sell in bundles.
Are spa gift certificates taxed when sold?▼
A certificate that can be used for several services is taxed when it is redeemed for tanning, not when it is bought. The person redeeming it pays the tax, by a debit from the balance or in cash.
File the indoor tanning tax online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: Regulations section 49.5000B-1, T.D. 9621, 2013-28 I.R.B.; Instructions for Form 720 (Rev. June 2026); Pub. 510 (Rev. December 2025); Form 720 (Rev. June 2026). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
