Representative Martin Daniel, Senator Richard Briggs Announce Legislation To Eliminate Unfair Tax on Fitness Centers

September 28, 2018

(NASHVILLE) — This week, State Representative Martin Daniel (R–Knoxville) and State Senator Richard Briggs (R-Knoxville) announced their intent to file legislation to completely eliminate Tennessee’s unfair tax on fitness centers that discourage Tennesseans from staying healthy and put an unnecessary burden on health club business owners across the state.

Adopted in 1982 and referred to as the “amusement tax”, the statute was amended in 1986 to exclude fitness centers with more than 15,000 square feet of space. Over time, this has created an unlevel playing field between the approximately 30 big box fitness centers in Tennessee and the estimated thousand or more smaller yoga, barre, and club studios across the state. As a result, customers who are members at these smaller clubs pay a nearly 10% amusement tax, while customers at the larger facilities do not.

“Tennesseans who want to join a gym or sign up for yoga or similar activities should not be discouraged from doing so by the addition of these unnecessary extra costs,” said Representative Daniel. “It makes no sense for us, as a state, to encourage healthier living, but to tax activities relating to that.  The state should not be in the business of burdening those who want to get healthier, nor should we be placing business owners in a position of having to find ways to cover these unneeded costs. I am proud to join with Senator Briggs in working to officially remove this tax from the law books.”

According to fiscal calculations, the elimination of the amusement tax on fitness centers altogether would save Tennesseans across the state an estimated $16 million per year. In addition, advocates in favor of abolishing the tax also point out that it would further encourage an overall healthier workforce and state. Last year, Tennessee ranked in the bottom five states for obesity and fitness.

Along with the health benefits, those in favor of doing away with the amusement tax also point to the confusion and business risk associated with its implementation. In 2017, several operators in Knox County were assessed six-figure amounts due to lack of compliance with the complicated tax, not knowing they had to collect this tax from the customers. While more operators are complying after recent guidance from the state, some still do not, putting significant risk on both owners and customers of these smaller health clubs.

“Eliminating this tax will help relieve health club owners from unneeded risk and ensure the state does not face almost-certain, costly litigation in the future,” continued Daniel. “This nonsensical tax should have never been imposed on Tennesseans, and I believe that we will have much support for its elimination.”

Martin Daniel lives in Knoxville and represents House District 18, which encompasses West Knoxville, including Cedar Bluff, West Hills, Deane Hill, Rocky Hill, Ridgedale, and Pleasant Ridge. He was elected in 2014 and is currently in his second term as State Representative. He serves on the House State Government Committee, and on its Civil Justice Committee. Rep. Daniel can be reached by email at: Rep.Martin.Daniel@capitol.tn.gov or by calling (615) 741-2287.

Richard Briggs serves as Chairman of the Senate Ethics Committee. He is also 1st Vice-Chair of the Senate State and Local Government Committee and a member of the Senate Health & Welfare and Senate Transportation & Safety Committees. Briggs lives in Knoxville and represents Senate District 7. He can be reached by email at: Sen.Richard.Briggs@capitol.tn.gov or by calling (615) 741-1766.