Were fitness-club membership charges exempt when members could use the gym only during instructor-led classes?

Plain-English summary

The Florida Department of Revenue ruled that fees under a fitness operator's proposed membership agreements were not taxable admissions because they were exclusively for professional instruction.

Members could enter and use the gym only during scheduled instructor-led class periods. The Department also said the classes had to be designed with a goal of completion; simply relabeling ordinary recreational dues as instruction fees would not qualify.

The exemption applied only after the proposed agreements were executed. The operator remained responsible for collecting sales tax under its earlier agreements until then.

What this means for you

Fitness and sports instructors

An instructional-fee exemption depends on substance. Limit facility access to the actual instruction period and structure the program as instruction leading toward completion.

Accountants and club operators

Review the signed customer agreement, not merely the program's marketing label. Prior agreements can remain taxable until replaced.

Common questions

Q: Were the proposed membership fees taxable admissions?
A: No, because the agreements limited facility use to the professional-instruction periods.

Q: Could members use the gym outside class time?
A: No. Class-time-only access was central to the ruling.

Q: Is calling a charge an instruction fee enough?
A: No. The rule does not permit ordinary dues or membership fees to be exempted by relabeling them.

Q: What happened under the old agreements?
A: The taxpayer remained liable to collect sales tax until the proposed agreements were executed.

Citations and references

• Fla. Stat. §§ 212.02(1), 212.04, and 213.22
• Fla. Admin. Code r. 12A-1.005(4)(d)2

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 18A-002

Original ruling text

January 19, 2018

Executive
Director
Leon Biegalski

TAX: Sales and Use Tax
TAA NUMBER: 18A-002
ISSUE: Admissions
STATUTE CITE(S): Section(s) 212.04, and 212.02(1), F.S.
RULE CITE(S): Rule 12A-1.005(4)(d)2., F.A.C.
QUESTION: Are dues and fees paid by members exempt from sales tax as dues and fees paid
for instructional classes?
ANSWER: Yes, members have access to the gym facilities only during the instructional class
periods.
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
Subject: Technical Assistance Advisement (“TAA”)
TAA 18A-002
Sales and Use Tax-Admissions
Section(s) 212.02(1), and 212.04, Florida Statutes (“F.S.”)
Rule(s) 12A-1.005(4)(d)2., Florida Administrative Code (“F.A.C.”)
XXXXXX (“Taxpayer”)(“Owner”)(“Petitioner”)
Business Partner Number: XXXX
FEIN: XX-XXXXXXX
XXXXXXX
Dear XXXX:
This letter is a response to your petition dated November 9, 2017, for the Department’s issuance
of a Technical Assistance Advisement (“TAA”) to Petitioner, regarding memberships. Your
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

www.floridarevenue.com
Florida Department of Revenue
Tallahassee, Florida 32399-0100

Page 2 of 3
Technical Assistance Advisement
petition has been carefully examined, and the Department finds it to be in compliance with the
requisite criteria set forth in Rule Chapter 12-11, F.A.C. This response to your request
constitutes a TAA and is issued to you under the authority of section 213.22, F.S.
Facts
Taxpayer operates XXXXXX. Taxpayer sells memberships, drinks, and clothing. The
memberships enable clients to attend XXXX classes. Your previous request provided that the
gym facility is only available to members during class time. Taxpayer has several XXXXX in its
gym facility that are used by members.
The request included copies of XXX proposed agreements which provide that the agreement
entitles members to access Taxpayer’s facilities and instructional services only during class time
posted at Taxpayer’s facility. The class includes instruction for a full-body workout that begins
with warm-up stretching, followed by intervals of XXXXX and XXXXX calisthenics, and
aerobics, and culminates with cool-down stretching.
Applicable Law and Response
Section 212.04(1), F.S., requires sales tax to be collected on the sales price or amounts received
from the sale of admissions. Section 212.02(1), F.S., defines the term “Admissions.” It
provides, in part, the following:
(1) The term “admissions” means and includes the net sum of money after
deduction of any federal taxes for admitting a person or vehicle or persons to any
place of amusement, sport, or recreation or for the privilege of entering or staying
in any place of amusement, sport, or recreation, including, but not limited to, …
any place where charge is made by way of cover charges … or other fees or
receipts of anything of value measured on an admission or entrance or length of
stay … in any place where there is any … sport, or recreation, and all dues and
fees paid to private clubs and membership clubs providing recreational or
physical fitness facilities, including, but not limited to … athletic, exercise, and
fitness facilities …. (Emphasis added)
As provided by s. 212.02(1), F.S., the term “admissions” includes all dues and fees collected by
private or membership clubs providing recreational facilities. Your request maintains that the
dues and fees payments are for instructional classes.
Rule 12A-1.005(4)(d)2., F.A.C., provides, the following:
(d) Fees paid to private clubs or membership clubs that do not entitle the payor to
the use of the club’s recreational or physical fitness facilities are not subject to
tax. Examples of such fees are:

2. Charges for professional instructions in any sport conducted at the club, so long

Page 3 of 3
Technical Assistance Advisement
as such charges are exclusively for the instructions and include the use of the
facility only during the period of time the instructions are taking place. It is
not the intention of this rule to allow a club to exempt what is in effect a dues or
membership fee by labeling such charges as instruction fees. (Emphasis added)
Rule 12A-1.005(4)(d), F.A.C., provides that certain charges are not considered taxable dues and
fees. Rule 12A-1.005(4)(d)2., F.A.C., provides that charges for professional instructions in any
sport conducted at a club are not dues and fees, so long as such charges are exclusively for the
instructions and include the use of the facility only during the period that the instructions are
taking place. The Rule provides that it is not the intention of the Rule to allow a club to exempt
what are in effect dues or membership fees by labeling such charges as instruction fees. As with
most instruction, once the member learns the sport for which instruction is provided, then it is
presumed that the instruction will be completed. In other words, classes must be designed with a
goal of completion by the member.
As required by the Rule, access to a club’s facilities must only be allowed during the class times.
Based on the proposed agreement language, the dues and fees paid pursuant to the agreements
are not subject to the tax imposed by s. 212.04, F.S., because Rule 12A-1.005(4)(d)2., F.A.C.,
provisions are applicable. Taxpayer is still liable for the collection of sales tax, pursuant to the
previous agreements, until the proposed agreements are executed.
This response constitutes a Technical Assistance Advisement under section 213.22, F.S., which
is binding on the Department only under the facts and circumstances described in the request for
this advice, as specified in section 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above. You are advised that subsequent statutory or
administrative rule changes, or judicial interpretations of the statutes or rules, upon which this
advice is based, may subject similar future transactions to a different treatment than expressed
in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of section 213.22, F.S. Confidential information must be deleted before public disclosure. In an
effort to protect confidentiality, we request you provide the undersigned with an edited copy of
your request for Technical Assistance Advisement, the backup material and this response,
deleting names, addresses and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department within 10 days of the date of this
letter.
Respectfully,
Chuck Wallace
Chuck Wallace
Technical Assistance & Dispute Resolution
(850) 717-7541
AMS ID: 7000031212