See Tennessee Department of Revenue Notice #18-09 (June 2018):

… dues or fees paid to health clubs or other facilities featuring exercise or other active physical fitness conditioning are subject to sales tax, unless a specific exemption applies. This includes dues or fees paid for use of the facility and services rendered at the facility…

Examples of taxable activities include: 

  • Aerobics 
  • Ballet barre
  • Yoga
  • Fitness boot camps
  • Spin/indoor cycling
  • Indoor rowing
  • Boxing and kickboxing
  • High intensity interval training (HIIT)
  • Cross training

It does not matter how the fees are charged, whether periodic, per class, or a single charge for a specific number of class. In addition, any charges that are required to be paid for use of a fitness facility and its services are subject to tax, including initial enrollment fees, initiation fees, and fitness equipment instruction fees.

The Notice goes on to note that fees or charges for instruction in sports or recreational activities are NOT subject to sales tax. The following are examples on non-taxable activities, according to the Notice:

  • Tennis lessons
  • Martial arts
  • Dance lessons
  • Gymnastics classes
  • Fencing lessons
  • Skiing lessons
  • Yoga teacher training

The Notice cites T.C.A. § 67-6-212(a)(1) and Sales Tax Rule 116 (pdf), neither of which are new. The implication, then, is that this is a new area of focus for the Tennessee Department of Revenue.

Posted by Joel D. Roettger, JD, LLM, EPLS