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Bill would exempt nonprofit gym memberships from sales taxes
TIFFANY L. PARKS
Special to the Legal News
Published: November 19, 2015
Gym membership would have its privileges under House Bill 334.
The proposed legislation, sponsored by Rep. Jim Buchy, would exempt nonprofit gym memberships from sales taxes.
“My interest in this issue began in 1992 when the tax was first implemented, causing Ohioans trying to get healthy at nonprofit gyms increased taxes,” Buchy, R-Greenville, recently told members of the House Ways and Means Committee.
“Nonprofit gyms operate for the good of the public and provide a needed service to more than 750,000 Ohioans. In 1992, many current and former legislators that I consider mentors, friends and statesmen on both sides of the aisle opposed this new tax.”
Given that a gym membership may be financially unattainable for some citizens, Buchy said nonprofit gyms grant the opportunity for all Ohioans to lead a healthy lifestyle.
“Providing access to organizations like the YMCA is an important matter,” he said.
A bill summary states that HB 334 would exempt memberships to gyms or other recreational or sports club facilities from sales and use tax if the membership services are provided by a federally tax-exempt nonprofit charitable organization, beginning in the first July following the bill’s effective date.
Continuing state law exempts such memberships to facilities provided by state agencies and local governments from sales and use taxation.
Buchy said there is minimal justification for a heavy taxation rate on nonprofit gym memberships.
“When this was first done, it was part of sweeping tax increases that included many new taxes on nonprofit and for-profit services,” he said, adding that Ohio is one of only six states that currently apply this type of a tax.
“As we correct our taxing problems in Ohio, removing this tax on nonprofit gym memberships is an appropriate step forward for Ohioans.”
Buchy said the tax amounts to less than $10 million.
The lawmaker called the figure a small amount compared to the $23 million plus in financial assistance provided to Ohioans who cannot afford the full-priced membership and other needed community services.
“Similar organizations have grown to be a community resource — so much more than just a gym,” he said.
“They are community nonprofits that provide chronic disease prevention, early learning and food support programming. This issue became relevant in the past nine months, as legislators have rallied around the YMCA in favor of repealing this unneeded tax. On multiple occasions, it has been suggested that this matter would receive fair consideration as a stand-alone bill.”
HB 334 has gained bipartisan support from nearly 30 House members.
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