Policy Market Blog

Taxing Fitness

Martin Kennedy - Friday, September 07, 2018

Some at the federal level are trying to make gym memberships and the cost of fitness-related expenses deductible by qualifying them as medical expenses.  Meanwhile, The TN Dept of Revenue issued a notice in June that clarified a previous notice that dealt with what’s known as the ‘Amusement Tax.’   

Bottom line?  The state plans to impose a tax on gym memberships and services provided within the gym such as fitness training.  Worse still, the tax is not applied universally.  Large fitness centers are exempt.      

 Jim Brown, the state’s director of the NFIB, estimated that there are about 30 fitness centers who qualify for the exemption and that the thousands that do not will suffer significant harm. 

TPM:  He’s right.  Imagine running a small community gym and competing against one of the ‘big boys.’  An exemption based on size, is the state entering the marketplace and putting its thumb on the scale against you for no apparent reason. 

A good argument can be made to eliminate the tax (we want more fitness, not less), but the exemptions are especially bad policy. 

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