As another semester of nonprofit accounting comes to a close, I can't help but note the aspect of the Form 990 that seems to most perplex accounting students. Is it the application of SOP 98-2? The proper treatment of donor benefits for special events? The reporting of pass-through funds? No, it is this little gem on page 5 of the form:
A requirement to report payments for indoor tanning services does seem out of place. What is its origin? The PPACA included a 10% excise tax on indoor tanning services, and nonprofits are not typically exempt from the tax. To facilitate compliance, this question nudges nonprofits to consider their obligation. Naturally, many wonder whether this is really necessary; after all, how many nonprofits sell indoor tanning services? Peter Olsen-Phillips of the Chronicle of Philanthropy has our answer – in 2013, there were 26 who answered yes to question 14a.
This leads us to a bonus question, a nonprofit scavenger hunt of sorts: can you identify any of these 26 nonprofit tanning organizations?