Lee to include repeal of ‘gym tax’ in budget proposal

Gov. Bill Lee speaks to the National Federation of Independent Business at the Cordell Hull building in Nashville on Feb. 19, 2019. (Erik Schelzig, Tennessee Journal)

Republican Gov. Bill Lee says he will repeal the ‘gym tax’ as part of his first annual spending plan. The tax 10% tax on gyms, fitness centers, and health clubs brings in about $10 million in state revenues per year. It remains to be seen how much of that savings will be reflected in the cost of individual gym memberships. But gym owners are bound to be pleased.

Here’s the full release from the Lee administration:

NASHVILLE, Tenn. – Today, Tennessee Governor Bill Lee announced his plans to repeal the amusement tax on gym memberships in his upcoming budget.

 

“I’m pleased to be able to include a tax cut in my first budget,” said Lee. “Repealing the gym tax is an important step in reducing the burdens on small businesses in our state.”

 

The nearly 10 percent amusement tax is placed on memberships to gyms, fitness centers and health clubs and disproportionately impacts small business owners. On the books since the mid-1980s, the gym tax represents approximately $10 million in state revenue.

 

“Unfortunately, we’ve discouraged Tennesseans from investing in their health and wellness by taxing their efforts,” said Lee. “The skyrocketing costs of health care and Tennessee’s high rates of obesity and diabetes means we simply cannot afford to discourage healthy habits.”

 

According to the Department of Health, Tennessee ranks 40th in the nation for physical activity and 35th for adult obesity. Recent estimates show that illnesses related to diabetes, hypertension and cardiovascular disease cost Tennessee more than $5.3 billion annually in direct and indirect costs.

 

“I look forward to working with the legislature to modernize our tax code and prioritize the wellness of Tennesseans,” said Lee.

19 Responses to Lee to include repeal of ‘gym tax’ in budget proposal

  • MarLE says:

    As someone who goes to the gym for over a hr, 4-5 times a week….finally a tax break that actually makes sense. Now if the Fed Gov would price Medicare premiums on wellness initiatives (equiv to safe driver discounts) instead of on INCOME we’d be onto something. Bottom line is that if potato chips are taxed at 7% then gym membership should never have been at 10% . Now I will wait to see if this gets passed on to the customer.

  • David Collins says:

    Where is the 10 million dollar loss in revenue going to be made up from? We can’t keep our roads in good repair, expand broadband coverage to rural areas, or pay teachers a decent salary to keep them from going to other states, and this idiot wants to slice 10 million dollars in revenue from people who can obviously afford to pay it. I seriously doubt that there are many, if any, people who have failed to join a health spa or gym because of this minor tax “burden”.

    • D L Giacomino says:

      Did you ever hear if the expression “being nickeled and dimed to death”? You’re probably right; those who want to join a gym won’t let the tax stop them. However don’t you think Americans and Tennesseans already pay enough taxes?

    • James White says:

      Please don’t use my tax money to subsidize someone else’s’ broadband.

    • MarLE says:

      Teacher pay is not just a function of wages. It is a function of Pensions, time off, and additional benefits of job security etc. As for roads….I suppose the people who drive ON the roads and create the need for maintenance should pay for that. Who on earth ever thought that gym membership was an amusement, and thus subject to an amusement tax, in the first place?

  • R Tester says:

    David Collins – Just because you “can afford to pay it” doesn’t mean it is a fair tax. Your argument is just dumb. Taxing health is nonsensical. The tax does not apply to large gyms – just small. So the small business owner is also being impacted while large chain type gyms are excluded. How does that make sense? The tiny gym that I use was just back taxed $20,000 for failure to pay the tax that no one knew was even in existence – that can destroy a small business

    • J Chastain says:

      I am a small gym owner and am one of those that. Had to pay $22,000 in back taxes on a tax I did not know existed until I was audited for it. Even my accountant had not ever heard of the tax. I do not pass the cost onto my members I just pay it.

      • MarLE says:

        You should discuss with your accountant his responsibility in advising you . $22K in back taxes b/c a paid professional didn’t KNOW? I had an attorney who gave me bad advice regarding a State regulation on property I owned in DE. He was wrong and HE, recommended that I sue him b/c it WAS entirely his fault and he carried a type of insurance he said was there to cover this type of “mistake”. He was a personal friend who I would have had no inclination to sue (have never sued anyone in my life actually). Maybe you should have a talk with your accountant.

    • MarLE says:

      R Tester…..my gym membership at a large chain IS taxed. Where did you get the idea that it wasn’t?

  • Melissa says:

    David Collins, most of us that are affected by this “amusement “ tax can’t actually afford it, but like every other tax bestowed upon us we deal with it. This is a ridiculous, unfair, and uncalled for tax!! I’m sure you would agree if you decided to live a healthy life and decided to join a gym that had to pass the extra expense onto you. We al want good roads, excellent broadband, and to pay our teachers well!! Taxing on my planks and sit ups just isn’t the fair way!

  • Michael Lottman says:

    David Collins–you are exactly right! This is just the kind of luxury item that can be taxed without hurting anyone. Well-off people who frequent gyms and fitness centers are going to bear a lot more than that to get this state out of the rut Haslam and now Lee are putting us in. You can’t keep cutting every source of tax revenue you come across while at the same time recommending a host of new programs (some barely funded at all because there is no money). That’s pretty much what Trump does, except that he can run up trillions in debt while we have to cut needed current programs in order to fund new ones.

    • James White says:

      Only the House can run up the debt

    • MarLE says:

      Michael……I go to the gym to Avoid having Medicare PAY for high blood pressure Medicine, to pay for cholesterol Medicine, to avoid the other problems associated with being overweight and out of condition. But my membership Is Not covered, My medicine Would be covered. But my gym membership is Not. In addition you feel that this LUXURY should be taxed as if I were going to an amusement park or the movies?

  • Cannoneer2 says:

    I’d say make the tax fair and apply it to all gyms, regardless of size. Reduce the rate to 8% and proudly declare a tax cut.

  • Glendell says:

    Since when is working out ‘amusing’? Amusement tax, I don’t think so.
    When people workout 🏋️‍♀️ they decrease the our Medicare and insurance burdens. They should be rewarded not penalized. In addition, services are not normally taxed. The current law adds a sales tax to all forms of personal fitness lessons except fencing, tennis, skiing, and martial arts~ but only the small business owners are required to collect it and pay it. Not fair!

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  • Silence Dogood says:

    It is my money. What gives the state a right to take my money? Taxation is out of control. Quit giving benefits to illegals and give that money to teachers.

  • Donna Locke says:

    I just do yoga at home and take long walks and don’t have a maid, so…. But I’m against this tax.

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