City Council-Supported Gym Tax Repeal Advances to Governor's Desk

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A piece of legislation that would eliminate a 10 percent tax on small fitness centers in the state and that is largely supported by local officials passed in the Tennessee Senate Thursday.


The legislation, HB1138, would do away with the 10 percent amusement tax on small fitness centers, those under 15,000 square feet. The tax currently applies to gyms and studios providing exercise, athletics, or other fitness services such as cross-training, ballet barre, yoga, spin, and aerobics classes.


If the proposed legislation becomes law, the tax would still apply to facilities such as country clubs, golf courses, and tennis clubs.


The bill passed with a 28-1 vote in the state Senate Thursday, after moving through the House last week with a 95-0 vote. The legislation has to be signed by Governor Bill Lee to take effect.


The move to eliminate the tax was backed by the Memphis City Council through a resolution last month. The resolution, co-sponsored by council Chairman Kemp Conrad and Councilman Ford Canale, passed unanimously.


Conrad said the council is “thankful for the work of the National Federation of Independent Business (NFIB), the local fitness community, and Representative Mark White (TN-83) who was a champion for this cause.”


“The repeal of this antiquated disincentive for small businesses and those wanting a healthier lifestyle is a win for all Memphians, and all Tennesseans, whether as operators or patrons of local fitness, wellness, and recreation opportunities,” Conrad said. “We appreciate the state legislature having acted in the interests of promoting healthy activity in our communities.”


Canale, who chairs the council’s government affairs committee, applauded the governor for including the repeal in his proposed 2020 budget, saying “healthier outcomes for Memphians is a priority of ours and we seek to encourage wellness for all citizens.”


The move has also been supported by Shelby County Mayor Lee Harris, Shelby County Commissioner Brandon Morrison, and local small gym owners.


Tennessee’s adult obesity rate was 32.8 in 2017, making Tennessee the 15th-most obese state in the country, according to a report released in 2018. The report, called the “State of Obesity: Better Policies for a Healthier America,” also found that 30 percent of Tennessee adult residents are not physically active, 13.1 percent have diabetes, and 38.7 percent have hypertension.


The study, an effort by the Trust for America’s Health and the Robert Wood Johnson Foundation, used body mass index and other data from the Centers for Disease Control to identify obesity rates.

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