Is electricity used to power tanning beds at a tanning salon taxable in Texas?

Subject

Tanning Salon — Electricity For Tanning Beds Is Taxable, Unlike Exempt Golf Cart Battery Recharging

Plain-English summary

The Texas Comptroller ruled that a tanning salon's electricity for its tanning beds is taxable. The taxpayer's client ran a tanning salon and argued that the same logic behind Texas's exemption for electricity used to recharge golf cart batteries should also apply to the electricity used for tanning beds.

The Comptroller rejected that comparison. Electricity for recharging golf cart batteries is exempt because it is used in processing tangible personal property to be resold (rented) — that is, the recharging is part of preparing the golf carts for their next rental. Tanning bed electricity does not fit that reasoning, so it does not qualify for the same exemption. The Comptroller stated plainly that "the electricity used by the tanning salon for the tanning beds is taxable."

The letter notes that the opinion is based on the facts presented, and that the outcome could change if the facts were different.

What this means for you

Tanning salon owners

If you run a tanning salon in Texas, this ruling indicates that electricity used to power your tanning beds is taxable — you cannot exempt it on the theory that it is used to "process" a good for resale or rental the way golf cart battery recharging is exempt.

Golf cart rental businesses

The ruling reaffirms, in passing, that electricity used to recharge golf cart batteries is exempt, because that electricity is used in processing tangible personal property (the golf carts) to be resold, i.e., rented back out to customers.

Accountants and tax professionals

This letter is a useful illustration of how the Comptroller draws the line on the processing/resale exemption for electricity: the exemption turns on whether the electricity is used to prepare tangible personal property for resale or rental, not merely on whether the business involves recharging or powering equipment used by customers. An analogy to another exempt use will not succeed unless the underlying facts actually satisfy the same legal test.

Common questions

Q: Why is electricity for recharging golf cart batteries exempt but electricity for tanning beds is not?
A: According to the ruling, the golf cart battery electricity is exempt because it is used in processing tangible personal property to be resold (rented) — it prepares the golf carts to be rented out again. Tanning bed electricity does not involve processing property for resale, so the same exemption does not apply.

Q: Does this ruling mean all electricity used by a tanning salon is taxable?
A: The ruling specifically addresses electricity used by the tanning salon for the tanning beds, which it says is taxable. It does not address other possible uses of electricity by the business.

Q: Can I rely on this letter for my own tanning salon?
A: This is a STAR-published letter ruling, and under 34 Tex. Admin. Code Rules 3.1 and 3.10, it can be the basis of a detrimental reliance claim only for the taxpayer to whom it was directly issued. It also may no longer represent current policy. Consult a licensed Texas tax professional about your own facts.

Q: What if the facts of my business are different?
A: The letter itself states the opinion is based on the facts presented and could change if there are additional or different facts.

Citations and references

No specific statutes, administrative rules, or regulations are cited in the original ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9209L1193B03

Original ruling text

September 23, 1992

Dear **:

Thank you for your letter regarding the taxability of electricity used
for a tanning bed.

You state that your client has a tanning salon business. Your client
feels that the same logic applied to the tax exemption for charging
batteries for golf carts should also apply to the tanning beds.

The electricity for recharging the batteries is exempt because it is used
in processing tangible personal property to be resold (rented). The same
logic cannot be applied to the electricity used for the tanning beds. The
electricity used by the tanning salon for the tanning beds is taxable.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion could change.

If you have any questions, please don't hesitate to write the Tax
Administration Division or call one of our tax specialists toll free at
1-800-252-5555.

Sincerely,

Joan Hale
Tax Administration Division