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Sales Tax Proposals Continue to Threaten Health Clubs  

A possible state sales tax on health clubs has emerged in California, as lawmakers aim to replenish state coffers and close a reported $9.2 billion budget deficit. The proposal, Assembly Bill 1963 (AB 1963), would require health clubs to impose the state sales tax on services at a reduced rate of 4 percent. Click here for in-depth bill information.

The bill’s introduction is indicative of a national trend says Tim Sullivan, Senior Legislative Analyst for IHRSA. “It’s a typical reaction on behalf of legislators in difficult economic times to look for additional sources of revenue,” he said. Sullivan tracks legislative activity related to health clubs in all fifty states, and says IHRSA sees around 3-5 sales tax battles per year. This is a trend he sees continuing to grow due to prevailing economic deficits. IHRSA is also currently fighting a sales tax battle in Maryland and monitoring a potential threat in the city of Chicago.

But, Sullivan says, taxing health clubs is the wrong solution. Regular exercise and healthy lifestyles help reduce health care costs and boost employee productivity, which are critical to rehabilitating an economy, he said. “Governments should encourage these behaviors, not discourage them by taxing health club memberships and services.”

IHRSA has begun advocacy efforts to oppose AB 1963. IHRSA members can stay updated on the bill's progress and learn ways to get involved in IHRSA's fight against taxing healthy lifestyles on in the coming weeks. 

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