How Your Health Club Can Stop a Proposed Sales Tax

Club owners, employees, and members can help stop proposed sales taxes on health club memberships in five easy steps!

It’s pretty obvious that taxing health club memberships discourages people from exercising. What do lawmakers do when they want to discourage smoking or drinking too much sugar? They tax those products. So, why would lawmakers do the same to healthy lifestyles? Instead, policymakers should be actively encouraging physical activity, which improves health, helps bring down the cost of healthcare, and bolsters our national and local economies.

Policymakers who seek to tax physical activity are ignoring the high cost of physical inactivity. People who exercise regularly are significantly less likely to suffer from obesity-related and other chronic diseases, incur fewer health care costs, are less likely to suffer from depression and anxiety, and are more productive employees with lower rates of sick leave and absenteeism.

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So, what can a health club owner, employee, or member do to stop a proposed sales tax?

You are the perfect person to educate your lawmakers about the health and economic benefits of exercise, and how important your business is to the community. If legislation is introduced in your state that would impose or increase a sales tax on health club dues or services—even if there’s just a hint or a rumor of a proposal—start contacting your state representatives. In doing so, you can increase the likelihood that in the future your government will help—rather than hinder—the profitability of your club and the health of your community.

Step 1: Contact IHRSA

We do all we can to predict when and where sales tax proposals will happen and to track legislation as it is introduced, but word of a tax proposal often gets around before it is introduced as legislation—which is when IHRSA’s tracking system would pick it up. You are our eyes and ears on the ground, so if you hear of a sales tax proposal arising, email IHRSA immediately so we can start influencing policymakers in your area.

The sooner we know of a proposed sales tax, the sooner we can work with lobbyists—funded in part by the Industry Leadership Council—in battleground states, or create grassroots campaigns to help you, your staff, and your community take your message to your lawmakers. Something we can only do if alerted in time.

Step 2: Educate Your Staff

Make sure your staff is well-versed on the issue, how it will hurt sales, retention, and your community’s health. Your staff needs to have appropriate talking points before you alert your membership.

Step 3: Mobilize Your Members

Your members are your strongest, most vocal advocates. Get them involved. Since they are already investing in their health and believe in the benefits of regular exercise, they are more likely to speak out against a tax on wellness. Statistically, health club members are more likely to be politically active, use that to your business’ advantage and encourage them to talk to their legislators.

Step 4: Build Alliances

Remember, you’re not in this alone. Defeating a sales tax legislation would benefit health clubs all over your state. If you have contacts at other clubs—including boutique fitness studios and other fitness and wellness businesses that may be impacted by the tax—put those connections to work. If you don’t have any contacts, now is the time to develop them. So as soon as a tax proposal is confirmed, you can work as allies in this fight. Our team at IHRSA will help rally clubs across the state to oppose harmful legislation.

Step 5: Leverage Local Media and Social Media

Engage your local and statewide media outlets to spread the message about how a sales tax on health club services would detrimentally impact the health, happiness, and prosperity of your state. You can also create a social campaign, a hashtag, or host an event to help build awareness of your campaign and garner support. The goal is to demonstrate to lawmakers your club’s commitment to fighting for healthy lifestyles and reducing obesity and chronic disease leading to lower health care costs.

This doesn’t require a large budget either, there are several easy and cost-effective ways to spread your message including sending news releases to newspaper and magazine editors or radio station and local news channel producers. You can also submit letters to the editor or op-eds sharing the importance of healthy lifestyles and incentives for exercise. Typically, state legislatures have one or a few publications widely read by lawmakers and their staff. Keep it simple and check length requirements.

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Currently, 25 states and the District of Columbia tax health club memberships, and since 2017, 11 states have considered applying or expanding a sales tax to health club memberships or services. While taxing fitness memberships is the exact opposite of what lawmakers should be doing, IHRSA is seeing an increasing number of states propose taxes like these as new revenue streams, even from traditionally low-tax and business-friendly states.

For more details on fighting a sales tax, see our member-exclusive e-book, “Guide to Fighting a Sales, Service, Or Amusement Tax On Health Club Membership.”

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Jeff Perkins @JeffD_Perkins

Jeff Perkins is the Assistant Vice President of Government Relations for IHRSA. He's responsible for monitoring and influencing legislation at the state and federal level to protect club business models and operations, and help promote the health benefits of exercise. Jeff enjoys running, soccer, ice hockey, and ice cream, not in that order.