Is a gym's charge to an independent personal trainer for using its facilities subject to New York City sales tax?

Plain-English summary

An independent personal trainer works at gyms in New York City under an "Independent Trainer Agreement," paying a gym in advance for set hours of "rental use of equipment and space" — shared gym space, showers, towels, basic utilities. The gym charges the trainer NYC local sales tax on that fee. The trainer objected, arguing independent trainers aren't mentioned in the Tax Law and that the charge is really a non-taxable rental of real property. It asked whether the tax applies.

The Office of Counsel said yes:

• NYC Administrative Code § 11-2002(a) (authorized by Tax Law § 1212-A(a)(2)) imposes a 4.5% NYC sales tax on "every charge for the use of" weight-control salons, health salons, gymnasiums, and similar establishments — whether or not tangible personal property is transferred.
• Whether trainers are "mentioned" in the Tax Law is irrelevant; what matters is whether the charge is for the use of a covered facility. Covered establishments are those "directed at the improvement of bodily appearance," not those offering participatory sports/athletic facilities (Matter of Prospect Park Health and Racquet; TB-ST-329). This gym — exercise equipment, weight loss/conditioning, no participatory sports — is squarely covered.
• It is not a non-taxable real-property lease. A lease gives the tenant a specific space with unlimited control of access (20 NYCRR 527.6(b)(2)); here the trainer gets only shared, non-exclusive "gym space" by the hour, conveying no interest in real property.

So the gym's charge to the trainer is subject to NYC sales tax.

What this means for you

Gyms, studios, and fitness facilities (NYC)

Charges for the use of your facility are NYC-taxable — including charges to independent trainers who pay for shared access to train their own clients. It doesn't matter that the payer is a business rather than a retail member.

"It's a space rental" usually won't work

Calling hourly shared access a "real-property lease" doesn't escape the tax. A true lease requires a specific, exclusively controlled space — not shared gym floor by the hour.

The participatory-sports distinction

The NYC tax targets facilities aimed at bodily appearance/fitness (gyms, health salons). Establishments offering participatory sports (e.g., swimming, racquetball) are treated differently — facility type matters.

Common questions

Q: I'm an independent trainer, not a member — why am I charged sales tax?
A: Because the tax applies to any charge for the use of a covered fitness facility, regardless of who pays. Trainers needn't be named in the statute.

Q: Isn't paying for gym space just renting real property?
A: No. You get shared, non-exclusive use by the hour, not a specific space with controlled access, so it's facility use — taxable — not a real-property lease.

Q: Would the answer change for a swim or racquet club?
A: Possibly — facilities offering participatory sports/athletic facilities are treated differently from gyms directed at bodily appearance.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

• Tax Law § 1212-A(a)(2) (authorizing NYC tax on health/fitness establishments)
• New York City Administrative Code § 11-2002(a) (tax on charges for use of gyms/health salons)
• 20 NYCRR 527.6(b)(2) (lease of real property vs. service)
• Matter of Prospect Park Health and Racquet Associates, Tax Appeals Tribunal (July 22, 1997); TB-ST-329; TSB-A-14(18)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2017.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a17_16s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-17(16)S
Sales Tax
August 2, 2017

Office of Counsel
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S150420E

The Department of Taxation and Finance received a Petition for an Advisory Opinion from
REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED RED
REDACTED (“Petitioner”). Petitioner asks for an opinion regarding the “[a]pplicability of sales tax on
independent trainers by a gym.” We conclude that the New York City local sales tax applies to all
charges by a gym for the use of its facilities, including such charges made to independent trainers.
Facts
Petitioner provides personal training services to clients in New York City. These services are
provided by Petitioner at various independently-owned facilities in the City. Petitioner has entered into
an “Independent Trainer Agreement” (Agreement) with at least one gym. Pursuant to this Agreement,
Petitioner pays in advance for a set amount of time at the facility (i.e., a set number of hours) during
which time Petitioner is provided with the “rental use of equipment and space” there. Specifically, the
Agreement gives Petitioner access to “shared gym space,” including the use of showers, towels and
“basic utilities.” Petitioner, however, is required to provide its own phone service while at the facility,
and it is responsible for, among other things, the setting of its own schedule and the billing of its
clients. According to Petitioner, the facility does not charge Petitioner’s clients to use the facility while
training with Petitioner. However, the facility is collecting New York City local sales tax from
Petitioner on the fee that Petitioner pays to the facility pursuant to the Agreement.
Petitioner provides little information about the facility at issue, but the facility’s website
indicates that it operates at multiple locations in the City, that it is a personal fitness training studio, and
that it has state of the art exercise equipment. In addition, the facility advertises an expertise in weight
loss/gain, total body conditioning, rehabilitation, strength and conditioning, flexibility, bone density,
posture, blood flow, and advice regarding life style changes to maintain health and wellness.
Information obtained from the facility’s website and confirmed by Petitioner reflects that the facility
generally provides users with access to exercise equipment, such as weights and cardiovascular
machines, and there is no indication that it offers participatory sports or has athletic facilities.

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TSB-A-17(16)S
Sales Tax
August 2, 2017

Analysis
As authorized by Tax Law § 1212-A(a)(2), New York City Administrative Code § 11-2002 (a)
provides in relevant part:
There are hereby imposed and there shall be paid sales taxes at the rate of four and one-half
percent on receipts from . . . every sale of services by weight control salons, health salons,
gymnasiums, turkish and sauna bath and similar establishments and every charge for the use of
such facilities, whether or not any tangible personal property is transferred in conjunction
therewith . . . . [Emphasis added.]
Petitioner initially contends that it should not be charged sales tax because “[i]ndependent
trainers are not mentioned in [the] NY tax code.” However, whether or not independent trainers are
mentioned in the Tax Law is not relevant to whether charges paid by them are subject to sales tax.
Rather, the sales tax being collected from Petitioner in this matter is a tax resulting from a charge
imposed on it by a facility, the appropriateness of which turns on whether the charge is one for the use
of a “weight control salon, health salon, gymnasium . . . [or] similar establishment” for purposes of Tax
Law § 1212-A(a)(2) and New York City Administrative Code § 11-2002(a). In this regard, the Tax
Appeals Tribunal has determined that such establishments are those that “provide activities directed at
the improvement of bodily appearance and not those which offer participatory sports and athletic
facilities.” See Matter of Prospect Park Health and Racquet Associates, Tax Appeals Tribunal, July
22, 1997; Tax Bulletin, Health and Fitness Clubs (TB-ST-329). Some examples of participatory sports
are swimming and racquetball. See, e.g., TSB-A-14(18)S.
As noted above, there is nothing to suggest that the facility at issue offers participatory sports or
athletic facilities to users. Rather, the facility appears to be one squarely directed “at the improvement
of bodily appearance,” which is precisely what the Administrative Code § 11-2002(a) sales tax pertains
to. Accordingly, any charges for the use of that facility are properly subject to New York City sales
tax.
Petitioner, however, suggests that what it is being charged by the facility is not a charge for the
use of that facility, but is rather a charge for the rental of real property. However, Petitioner’s
Agreement with the facility does not give it the right to the exclusive use of any specific part of the
facility’s space. Rather, it provides Petitioner with the “rental use of equipment and space” on a per
hour basis, and the space being “rented” is actually “shared gym space.” The agreement, therefore,
simply gives Petitioner the right to use the facility and its equipment for a certain number of hours, and
does not convey an interest in real property to Petitioner. See, e.g., 20 NYCRR 527.6(b)(2)
(distinguishing between a lease of real property and the provision of a storage service by noting that
"under a lease, the tenant contracts for a certain amount of footage in a specific location” [and] the

TSB-A-17(16)S
Sales Tax
August 2, 2017

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tenant has unlimited control of access to the space”). Accordingly, the fee the facility is charging
Petitioner in this case is for the use of the facility, and it is subject to tax under New York City
Administrative Code §11-2002(a).
DATED: August 2, 2017

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

NOTE:

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts
set forth therein and is binding on the Department only with respect to the person or entity
to whom it is issued and only if the person or entity fully and accurately describes all
relevant facts. An Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific time period at issue
in the Opinion. The information provided in this document does not cover every situation
and is not intended to replace the law or change its meaning.