Fitness Center Charges Not Subject to Tax in Tennessee

Friday, August 19, 2011

The Tennessee Department of Revenue has issued a letter ruling stating that membership fees for physical fitness facilities are exempt from tax. Tenn. Code Ann. Sec. 67-6-330(a)(17)(A) specifically exempts fees paid to “any corporation or enterprise that offers, on a regular, full-time basis, services or facilities for the development or preservation of physical fitness through exercise or athletics.” Fees exempt from tax include membership fees, activation fees collected for photo identification cards, charges for guest passes, equipment charges, and fees charged for renting out physical fitness facilities. Fees charged by facilities that may be classified as “recreation clubs” or “health spas” will still be subject to Tennessee sales tax under Tenn. Code Ann. Sec. 67-6-212(a)(1).

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