Gov. Lee plans to end the gym tax in Tennessee

NASHVILLE (WDEF) – Tennessee Governor Bill Lee wants to repeal the amusement tax on gym memberships.

It will be part of his first budget for the state.

“I’m pleased to be able to include a tax cut in my first budget,” said Lee. “Repealing the gym tax is an important step in reducing the burdens on small businesses in our state.”

The tax dates back to the mid-1980s.

It is almost a 10% tax on memberships to gyms, fitness centers and health clubs.

The governor is targeting the tax because it picks on small business owners and Tennessee’s overall health. 

“Unfortunately, we’ve discouraged Tennesseans from investing in their health and wellness by taxing their efforts,” said Lee. “The skyrocketing costs of health care and Tennessee’s high rates of obesity and diabetes means we simply cannot afford to discourage healthy habits.”

Of course, it is no accident that Tennessee has more of these specialty sales taxes than other state.  Tennessee does not have an income tax or a singular industry to tax (Florida taxes tourists instead of an income tax, Texas taxes oil instead of an income tax). So Tennessee has traditionally counted on a web of sales taxes to make up the difference.

But the Governor seems to be promising to take a new crack at the tax code. 

“I look forward to working with the legislature to modernize our tax code and prioritize the wellness of Tennesseans,” said Lee.