Gym Fees Soon to be Exempt from Sales Tax

The new law applies to gyms, fitness centers, fitness studios, high intensity interval training, cross training, ballet barre, pilates, yoga, spin classes, and aerobics classes. In a previous post, we noted that in June 2018 the Tennessee Department of Revenue issued a Notice regarding gym fees. The Notice reminded taxpayers that dues or fees paid to health clubs and other facilities are subject to sales tax. Although the rule was not new, most people, including gym owners, were apparently unaware of it. In response to the outcry over the Notice, the Tennessee Legislature took action by introducing House Bill 1138 in February. HB1138, as amended, replaces the existing, but limited, sales tax exemption for gym fees found at T.C.A. § […]

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Are Gym Fees Subject to Sales Tax in Tennessee?

Yes.

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Are Software Related Transaction Fees Subject to Tennessee Sales and Use Tax?

In Letter Ruling 17-01, the Tennessee Department of Revenue (the “Department”) ruled on the taxability of software-related transaction fees. This ruling illustrates that not all transaction-based fees are taxed the same for sales and use tax purposes. Taxability of the fee depends on what the fee is for. Fees charged for the license of software are taxable; fees charged for non-taxable services are not taxable. The Taxpayer (a Tennessee company) licenses voice-recognition software (“Software”) from an unrelated software provider (the “Provider”). The Provider charges the Taxpayer a fee based on the number of reports the Taxpayer generates from using the Software. The Taxpayer downloads the Software onto its servers located in Tennessee. The Taxpayer provides transcription and storage services to […]

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Redesign of Tennessee Department of Revenue Blanket Certificates of Resale and Exemption Certificates

On March 8, 2017, the Tennessee Department of Revenue announced that it redesigned its blanket certificates of resale and sales tax exemption certificates. Old certificates previously issued by the Department of Revenue are still valid as long as the expiration date has not passed.

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Reminder: Internet Purchases ARE Subject to Sales/Use Tax in TN

On March 4th, the Tennessee Department of Revenue published a new Frequently Asked Question on its website to address whether items purchased from the internet and delivered to a Tennessee address are subject to sales or use tax. The Department says that if the seller ships the items to a Tennessee address and does not charge Tennessee sales tax, then the purchaser must pay Tennessee use tax. They include a helpful link to the consumer use tax return. Taxpayers that owe use tax must file the use tax return and pay the tax at least annually but may choose to file and pay more frequently. Here is the FAQ as published: Question: Are sales made on the Internet subject to […]

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