UPDATE: 2/25/19
Governor Bill Lee announced his plans to repeal the amusement tax on gym memberships in his upcoming budget. You can read more about this online at https://www.tn.gov/governor/news/2019/2/19/gov–bill-lee-to-repeal-the-gym-tax-in-the-upcoming-budget.html
We encourage you to still contact your representatives in the state, to let them know you’re in full support of this decision.
___________________________________
Part of the job of the Chamber of Commerce is watching for legislation that will affect Chamber members and businesses. After a great meeting today setup by the Tennessee Chamber of Commerce Executives (TCCE) and including Chambers, legislators, business owners and other business related groups, the Humboldt Chamber has noticed at least two current initiatives that bear watching. Both of these have to do with what the NFIB (National Federation of Independent Business) refers to as “discriminatory.” They plan to watch these closely this legislative term and assist with pushing them along the process. The Humboldt Chamber will also be watching.
The following excerpts are directly from the NFIB website (www.nfib.com).
Eliminate the Professional ‘Privilege’ Tax
Tennessee has a discriminatory professional privilege tax on 22 professions. The annual $400 tax is particularly hard on start-up audiologists, landscape architects, podiatrists and speech pathologists. Tennessee law states “engaging in any vocation, profession, business or occupation named in this part is declared to be a privilege taxable by the state alone.” It’s time to end Tennessee’s last income tax that indiscriminately hurts entrepreneurs.
Eliminate Unfair Amusement Tax on Fitness Centers
The amusement tax on small fitness centers is also discriminatory and should be abolished. In 1986, big box fitness centers over 15,000 square feet obtained an exemption from the tax. Today, nearly 30 large entities don’t collect it, while 600 small fitness studios must collect from their customers. The nearly 10 percent tax on good health has caused significant customer migration, slowed small business expansion, and created confusion in the industry, which has led to several six-figure assessments that could lead to closures.
The Professional Privilege Tax includes the following professions:
Agent (Securities) , Architect, Attorney, Audiologist, Broker-Dealer, Chiropractor, Dentist, Engineer, Investment Advisor, Landscape Architect, Lobbyist, Optometrist, Osteopathic Physician, Pharmacist, Physician, Podiatrist, Psychologist, Real Estate Principal Broker, Speech Pathologist, Sports Agent and Veterinarian. Now, while $400 a year may be easy for seasoned attorneys or physicians, it may not be so easy for someone just starting out. What makes it a “privilege” to do business in Tennessee in one of these fields instead of a “right?”
As for the Amusement Tax, in order to qualify for an exemption, your gym must be open seven days a week for at least seventy hours, have at least 15,000 square feet of space dedicated for physical fitness, and offer at least three of the following: racquetball courts, track or swimming, aerobics, exercise equipment, or blood chemistry and urinalysis health assessments. In other words…”big box” as the NFIB puts it. This is not your local crossfit gym or bootcamp. Those businesses have to charge you – the member – an extra 9.75% because they have to pay it to the state. That’s not exactly encouraging you to get fit. Or at least not to get fit in your neighborhood, family-owned establishment.
We’ll be watching for more information on these two issues as the 111th Legislative Session gets underway beginning in January. If you want to put in your two cents, I’m adding the contact information for our local representatives below.
Representative Curtis Halford
House District 79
Rep.Curtis.Halford@capitol.tn.gov
Senator John Stevens
Senate District 24
Sen.John.Stevens@capitol.tn.gov
You can contact the NFIB on their website (www.nfib.com) or by phone at
1-800-NFIB-NOW (800-634-2669)
