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 40^th in the nation for physical activity and 35^th 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.