What Taxes Does a New Med Spa Pay? A Complete Guide

2026-08-21

New med spa owners face federal, state, and local taxes. Learn what to pay, when, and how to stay compliant with this practical guide.

Starting a med spa involves more than buying lasers and hiring staff. You also take on a stack of tax obligations at the federal, state, and local levels. This guide breaks down the specific taxes a new med spa pays, with realistic figures and steps you can take this week to stay compliant.

Federal Taxes

Income Tax

Your med spa is likely a pass-through entity (LLC, S corp) or a C corp. For pass-throughs, profits flow to your personal return and are taxed at your individual rate. The federal corporate rate for C corps is a flat 21%. Most new med spas choose an LLC taxed as an S corp to save on self-employment taxes. Expect to pay quarterly estimated taxes if you expect to owe more than $1,000 for the year.

Self-Employment Tax

If you are a sole proprietor or LLC member, you pay 15.3% on net earnings (12.4% Social Security, 2.9% Medicare). An S corp election lets you pay yourself a reasonable salary and only pay FICA on that salary, not on all distributions. Many med spa owners save thousands this way.

Employment Taxes

If you have employees, you must withhold federal income tax, Social Security, and Medicare. You also pay the employer share of FICA (7.65% per employee). Plus federal unemployment tax (FUTA) is 6% on the first $7,000 of each employee’s wages, though you get a credit for state unemployment taxes.

Excise Taxes

Med spas rarely owe federal excise taxes unless you sell certain medical devices or tanning services. The tanning tax is 10% on indoor tanning services. If you offer tanning, you must collect and remit it.

State Taxes

State Income Tax

Most states tax business income. Rates vary widely: from 0% in states like Texas and Florida to over 13% in California. Check your state’s department of revenue for the current rate and whether you need to file a separate state business return.

Sales Tax

This is a big one for med spas. You must collect sales tax on retail products (skincare, cosmetics) and often on certain services. Many states consider cosmetic procedures (Botox, fillers) taxable, but medical treatments may be exempt. For example, in California, Botox is taxable, but in New York, it is not. You must register for a sales tax permit, collect the tax, and file returns monthly, quarterly, or annually depending on your volume.

State Unemployment Tax (SUTA)

If you have employees, you pay state unemployment insurance. Rates vary by state and your experience rating. New employers often pay a standard rate, typically 2% to 4% of the first $10,000 to $15,000 of wages.

Local Taxes

City or County Business License Tax

Many cities and counties require a business license or gross receipts tax. Fees range from $50 to $500 per year, but some cities (like Los Angeles) base it on gross receipts, which can be hundreds or thousands. Check your local tax office.

Personal Property Tax

Some states tax business equipment, including lasers, computers, and furniture. This is often called a tangible personal property tax. For example, Texas has a franchise tax, and Virginia has a business personal property tax. The rate is usually a percentage of the asset’s value, often 1% to 2%.

Estimated Quarterly Taxes

If you are a pass-through entity, you must pay estimated taxes quarterly. The IRS requires you to pay at least 90% of your current year’s tax liability or 100% of the prior year’s liability (110% if your adjusted gross income was over $150,000). Deadlines are April 15, June 15, September 15, and January 15. Use Form 1040-ES.

Tax Deductions for Med Spas

You can reduce your taxable income with these common deductions:

Equipment and supplies: Lasers, injectables, skincare products, and medical supplies are deductible as business expenses.
Rent and utilities: Your office lease and utility bills are fully deductible.
Payroll: Salaries, bonuses, and benefits for staff are deductible.
Marketing: Advertising, website costs, and social media promotions are deductible.
Professional fees: Legal, accounting, and consulting fees are deductible.
Insurance: Malpractice, liability, and property insurance premiums are deductible.
Continuing education: Courses and conferences for you and your staff are deductible.
Vehicle expenses: If you use a vehicle for business, you can deduct mileage (65.5 cents per mile in 2026) or actual expenses.

How to Stay Compliant: A Checklist

Get an EIN from the IRS (free, online).
Register with your state for income tax, sales tax, and unemployment tax.
Apply for a local business license and any permits (health, medical board).
Set up payroll if you have employees, using a service like Gusto or ADP.
Open a separate business bank account and use accounting software (QuickBooks, Xero).
Track all expenses with receipts and categorize them.
Set aside money for taxes each month: 25% to 30% of net income is a safe range.
File and pay quarterly estimated taxes by the deadlines.
Review sales tax rules for your state and collect the correct amount on taxable items.
Consult a CPA who works with medical practices to ensure you don’t miss deductions or filings.

FAQ

Do I have to charge sales tax on Botox injections?

It depends on your state. Some states tax cosmetic procedures, others exempt them. Check your state’s department of revenue or ask your CPA.

Can I deduct the cost of a laser I financed?

Yes, you can deduct the full cost in the year you place it in service using Section 179, or you can depreciate it over time. Your CPA can help you choose the best method.

What happens if I miss a quarterly tax payment?

The IRS charges interest and penalties on underpayment. The penalty is typically 0.5% of the unpaid amount per month, up to 25%. Avoid this by setting reminders and paying on time.

Should I form an LLC or S corp for tax purposes?

Many med spa owners choose an LLC taxed as an S corp to save on self-employment taxes. But the right choice depends on your income, state, and long-term plans. A CPA can model the numbers for you.

The Bottom Line

A new med spa faces a complex web of taxes: federal income, self-employment, employment, state income, sales, local business, and property taxes. The key is to plan ahead: register early, track expenses diligently, set aside a percentage of revenue, and work with a CPA who understands medical practices. Start by getting your EIN and registering with your state this week, and you will build a solid tax foundation for your business.