Tennessee Gov. Bill Lee announces plan to repeal amusement tax on gym memberships

Tennessee Gov. Bill Lee announces plan to repeal amusement tax on gym memberships

February 19th, 2019 by Andy Sher in Breaking News

Tennessee Gov. Bill Lee speaks during a news conference announcing that FedEx Logistics is establishing its headquarters in a downtown Memphis building on Tuesday, Feb. 12, 2019, in Memphis, Tenn. (AP Photos/Adrian Sainz)

Photo by Associated Press /Times Free Press.

NASHVILLE — Gov. Bill Lee on Tuesday announced his legislative package of bills will include legislation repealing an amusement tax on many gym memberships.

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

Lee, who assumed office last month, made the announcement in advance of a speech to the National Federation of Independent Business-Tennessee. For several years, NFIB-Tennessee has advocated for elimination of the tax for several years.

The group says the current law puts smaller gyms, fitness centers and health clubs at a competitive disadvantage because facilities with large square-footage operations are excluded from having to pay the levy. 

At nearly 10 percent, Lee says the "gym tax" represents approximately $10 million in state revenue.

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

His office cites state Health Department statistics showing Tennessee ranks 40th in the nation for physical activity and 35th in terms of adult obesity. Recent estimates show that illnesses related to diabetes, hypertension and cardiovascular disease cost Tennessee more than $5.3 billion annually in direct and indirect costs, according to the administration.

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

Contact Andy Sher at asher@timesfreeprpess.com or 615-255-0550. Follow on Twitter @AndySher1.