Which States Require Sales Tax on Gym Memberships?

The concept of sales tax is broadening beyond retail goods to include a variety of services, with a common example being the tax on fitness center and gym memberships. This introduces complexity for consumers and gym owners who must navigate tax compliance. The rules governing the taxability of these services are not uniform, creating a patchwork of regulations that differ from one location to another.

States That Tax Gym Memberships

A number of states have determined that fees paid for access to athletic and fitness facilities are subject to sales tax. These states classify gym memberships as a taxable service, similar to the sale of a physical product. The rationale involves categorizing these memberships under broader definitions such as “admissions” or “amusement services,” meaning the state’s sales tax must be added to the transaction.

It is the fitness business’s responsibility to collect this tax from its members and remit it to the state revenue agency. States that apply a statewide sales tax to gym memberships include:

• California
• Connecticut
• Florida
• Hawaii
• Iowa
• Kansas
• Minnesota
• New Mexico
• Washington

The taxability in some states comes with specific conditions. In Texas, for example, health and fitness club memberships are considered taxable amusement services. However, an exemption exists if the membership is purchased under a written prescription from a licensed practitioner of the healing arts for health maintenance purposes.

States That Do Not Tax Gym Memberships

Conversely, a larger group of states does not impose a statewide sales tax on gym and fitness club memberships. In these jurisdictions, the service of providing access to exercise facilities is considered exempt. This means that when a consumer pays for their membership, the price they see is the final price, without a separate line item for state sales tax.

In New York, for a club’s dues to be taxable, it must be an “athletic club” where members have a significant role in the club’s operations, a definition that excludes most health and fitness facilities. States without a statewide tax on these services include:

• Alabama
• Arizona
• Colorado
• Georgia
• Illinois
• Indiana
• Kentucky
• Maryland
• Massachusetts
• Michigan
• New York
• Pennsylvania
• Tennessee
• Virginia
• West Virginia

It is important to recognize that the absence of a state-level tax does not mean the service is entirely free from sales tax, as local jurisdictions may have the authority to levy their own taxes.

Defining Taxable Fitness Services

The term “gym membership” is broad, and state tax laws often create distinctions between different types of fitness services. The taxability of a service can depend on what the customer is paying for. General facility access, which allows a member to use cardio machines and weights, is the most commonly addressed service in state tax codes regarding fitness centers.

Beyond basic access, many fitness centers offer specialized services with different tax treatments. For example, one-on-one personal training sessions are often treated differently than general membership fees. In Florida, private instruction like personal training is not subject to sales tax, provided it is billed separately from the general membership. This distinction is common, as states may view personal training as a professional service rather than a recreational admission.

Group classes, such as yoga or spinning, can also have unique tax implications. Some states may bundle these classes into the definition of a taxable membership, while others might tax them separately if they are offered on a pay-per-class basis. The rise of digital fitness has also introduced complexity, as states apply existing sales tax rules to virtual classes and online subscriptions.

Understanding Local and Special District Taxes

The state-level sales tax is not the only tax that may apply to a gym membership. Many states grant cities, counties, and other special taxing districts the authority to impose their own local sales taxes on goods and services. These local taxes are levied in addition to any applicable state tax, meaning the total tax rate a consumer pays can be higher than the state rate alone.

These local taxes are sometimes referred to as “amusement taxes” or “local option sales taxes.” For example, a city might impose a 2% tax on all recreational admissions, which could include gym memberships. This tax could apply even if the state itself does not tax gym memberships, requiring business owners to be aware of local ordinances.

The impact of these local taxes can be substantial, as a consumer could pay a significantly higher total tax on their monthly fee. This demonstrates that determining the final cost of a gym membership requires a two-tiered analysis: first understanding the state’s position, and then investigating any applicable local taxes.