Are the membership dues and related fees (photo-ID activation, guest passes, towel/locker/equipment rentals, facility rentals) charged by a qualifying sports and fitness center exempt from Tennessee sales tax?

Plain-English summary

Tennessee normally taxes dues and fees to recreation clubs, health spas, and similar facilities under § 67-6-212(a)(1), plus charges for using sports/recreation equipment under § 67-6-212(a)(4). But § 67-6-330(a)(17) carves out an exemption for genuine physical-fitness facilities. The Taxpayer's sports and fitness center asked whether its membership dues and a range of related charges qualify. The Department said yes to all of them.

The center clears the statute's five qualifying tests in § 67-6-330(a)(17)(A)(i)–(v):

1. Certified staff — its Fitness Coordinator and Director are full-time employees certified to perform health assessments (the statute alternatively allows a state-licensed medical/paramedical employee).
2. Open ≥ 70 hours/week — the facility is open an average of 85–91 hours per week.
3. Daily participation — members may participate every day the center is open (even if a specific area is occasionally closed for an event, other areas stay open).
4. ≥ 15,000 sq ft for fitness — the center has well over 15,000 square feet dedicated to physical fitness.
5. Three+ listed programs — it offers racquetball, exercise equipment, a track, pools, and aerobic/group exercise (the statute requires three of: health assessments with blood chemistry and urinalysis, racquetball, exercise equipment, track or swimming, aerobics).

It is also not within the disqualified SIC categories (Industry 7992 and 7997). Because it qualifies, the Department ruled that the following are all exempt:

• Full-year and partial membership fees (the core holding).
• Photo-ID card "activation" fees — treated as a fee required for admission/membership (Rule 116(3) folds "any other fees required for membership" into dues), so they ride along with the membership exemption.
• Guest passes — admission fees that fall within the exemption.
• Towel, locker, and outdoor-equipment rental charges — even though equipment-use charges are normally taxable under § 67-6-212(a)(4), the exemption expressly reaches "rental charges for equipment" at a qualifying fitness enterprise.
• Facility rentals to non-exempt entities — admission/use fees within the exemption.

On retroactivity (Question 2), the exemption isn't self-executing: § 67-6-330(a)(17)(B) requires the Department to approve it first. But if the application shows all criteria were met before the application date, the Department can approve an effective date that predates the application.

What this means for you

Gyms, fitness centers, and recreation facilities

If you run a real fitness facility, the exemption can take your membership dues — and a surprisingly wide halo of related charges (guest passes, locker and towel fees, equipment rentals, even renting your space to outside groups) — out of Tennessee sales tax. But you have to apply and get the Department's approval; don't just stop collecting tax. Keep documentation of all five criteria (especially the certified-staff requirement, square footage, and hours) because that's what the approval turns on. If you've qualified for a while but only now apply, ask for a retroactive effective date.

Accountants and tax professionals

Note the structure: § 67-6-212 is the imposition statute (recreation/health-spa dues and equipment-use charges), and § 67-6-330(a)(17) is the exemption with its own five-part qualification test plus the SIC 7992/7997 disqualifier and a mandatory Department-approval step. The ruling's reach to ancillary fees flows from characterizing each charge as a membership/admission fee or an equipment-rental charge "paid to" the qualifying enterprise, then applying the exemption to that category.

Common questions

Q: Are all gym membership fees exempt from Tennessee sales tax?
A: Only if the facility meets all five tests in § 67-6-330(a)(17)(A) (certified staff, 70+ hours/week, daily participation, 15,000+ sq ft of fitness space, three+ listed programs) and isn't a disqualified SIC 7992/7997 business — and only after the Department approves the exemption.

Q: Does the exemption cover more than just dues?
A: Yes. For a qualifying center it also reaches photo-ID activation fees, guest passes, towel/locker/outdoor-equipment rentals, and facility rentals to non-exempt entities.

Q: Can the exemption apply retroactively?
A: The Department must approve it, but the approved effective date can predate the application if the facility met all the criteria earlier.

Q: Can another fitness center rely on this letter ruling?
A: No. A Tennessee letter ruling binds the Department only as to the specific taxpayer and facts it was issued to. This summary is informational only, not legal or tax advice.

Citations and references

Tennessee statutes (Tenn. Code Ann.):

• § 67-6-330(a)(17)(A) (exemption for physical-fitness facility dues, membership/admission fees, and equipment rental charges)
• § 67-6-330(a)(17)(A)(i)-(v) (the five qualifying criteria)
• § 67-6-330(a)(17)(B) (Department approval requirement; SIC Industry 7992 and 7997 facilities excluded)
• § 67-6-212(a)(1) (sales tax on dues/fees to recreation clubs and health spas); § 67-6-212(a)(4) (sales tax on charges for using sports/recreation equipment)
• § 67-6-101 et seq. (Retailers' Sales Tax Act)

Rule:

• Tenn. Comp. R. & Regs. 1320-5-1-.116(3) (2000) ("Rule 116(3)" — membership dues include initiation fees and any other fees required for membership)

Source

• Landing page: https://www.tn.gov/revenue/tax-resources/legal-resources/tax-rulings.html
• Original PDF: https://www.tn.gov/content/dam/tn/revenue/documents/rulings/sales/11-19.pdf

Original ruling text

TENNESSEE DEPARTMENT OF REVENUE
LETTER RULING # 11-19

WARNING
Letter rulings are binding on the Department only with respect to the individual taxpayer
being addressed in the ruling. This presentation of the ruling in a redacted form is
informational only. Rulings are made in response to particular facts presented and are not
intended necessarily as statements of Department policy.

SUBJECT
Application of the Tennessee sales tax to sports and fitness center membership fees.
SCOPE
This letter ruling is an interpretation and application of the tax law as it relates to a specific set of
existing facts furnished to the Department by the taxpayer. The rulings herein are binding upon
the Department, and are applicable only to the individual taxpayer being addressed.
This letter ruling may be revoked or modified by the Commissioner at any time. Such revocation
or modification shall be effective retroactively unless the following conditions are met, in which
case the revocation shall be prospective only:
(A) The taxpayer must not have misstated or omitted material facts involved in
the transaction;
(B) Facts that develop later must not be materially different from the facts upon
which the ruling was based;
(C) The applicable law must not have been changed or amended;
(D) The ruling must have been issued originally with respect to a prospective or
proposed transaction; and
(E) The taxpayer directly involved must have acted in good faith in relying upon
the ruling; and a retroactive revocation of the ruling must inure to the taxpayer’s
detriment.

FACTS
[TAXPAYER] operates a sports and fitness center at its [CENTER NAME] in [CITY],
Tennessee for the benefit of [REDACTED INFORMATION], as well as community members.1
[TAXPAYER]’s [REDACTED] are members of the [CENTER] facilities and, upon payment of
a [REDACTED] fee, automatically receive access privileges during [TIME PERIOD]. Effective
[DATE], employees [REDACTED] receive free memberships while employed by
[TAXPAYER].
Family members of [REDACTED], as well as [TAXPAYER]’s [REDACTED], staff and their
family members, and members of the community, access [CENTER] upon completion of a
membership form and payment of membership fees to [CENTER]. Members who do not have a
valid [TAXPAYER] photo identification card are required to pay an activation fee to obtain a
[CENTER] photo identification card that is used to gain entry to the physical fitness areas.
Guests accompanying a [CENTER] member may purchase a guest pass, valid for one day, and
use any [CENTER] facility. Guests do not complete a membership form. [CENTER] also
charges rental fees for towels, lockers, the golf simulator, outdoor equipment (i.e., tents, sleeping
bags and pads, camping equipment, backpacks, kayaks, paddles, personal flotation devices,
helmets, bicycles, etc.) and for use of the facility for special events.
[CENTER] employs four full-time professional staff members, one of which is the Fitness
Coordinator. The Fitness Coordinator is certified by the Aerobics and Fitness Association of
America as a personal fitness trainer and group exercise instructor and holds a CPR certification.
The Director of [CENTER], another of the professional staff members, also holds a CPR
certification and is certified by the American Red Cross to conduct CPR and first aid training
courses. Both of these employees are employed year round and generally work a regular 40-hour
per week schedule.
Both the Fitness Coordinator and the Director of [CENTER] are certified to perform health
assessments and physical fitness testing. The physical fitness testing is used to assess the
member’s current fitness level, in order to devise an individualized fitness program. These
employees also administer participant questionnaires, which are given to persons interested in
starting a physical fitness program to determine the safety or possible risk of exercise for them.
[CENTER] does not currently employ a staff member licensed by the state of Tennessee in a
medical and/or paramedical discipline. However, the [TAXPAYER] [CENTER] works with the
[REDACTED] to provide auxiliary services such as massage therapy. [REDACTED] does have
staff licensed by the state of Tennessee in a medical and/or paramedical discipline.
During the [TIME PERIOD], the facilities are open an average of 91 hours per week. At all other
times, the facilities are open an average of 85 hours per week. Members are entitled to participate
each day the facilities are open, but specific areas may be closed for a certain period of time due
to a special event or program. During the times a specific area is closed for a special event or
program, [CENTER] members have access to other parts of the facilities.

1

[TAXPAYER] has indicated that the facts presented in this letter ruling are valid with respect to all periods
beginning [DATE].

2

The [CENTER] facilities have over [NUMBER OVER 15,000] square feet used for physical
fitness purposes; approximately [NUMBER OVER 15,000] square feet of [REDACTED] are
used as physical fitness and participant space. Each space has square footage allotted for physical
fitness, as outlined below:
[REDACTED]
[CENTER] offers the following programs, activities, and equipment to its members: racquetball;
exercise equipment; a track for walking, jogging, and running; pools; and aerobic and group
exercise instruction.
QUESTIONS

1. Are the fees for both full-year and partial memberships in [CENTER] exempt for purposes of
   the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010)?
2. If the membership dues collected by [CENTER] are exempt from the Tennessee sales tax
   pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010), is the exemption applicable
   retroactively to [DATE], with respect to sales of full-year memberships?
3. Are the activation fees collected for photo identification cards exempt pursuant to TENN.
   CODE ANN. § 67-6-330(a)(17) (Supp. 2010)?
4. Are the charges for guest passes to the [CENTER] facilities exempt pursuant to TENN. CODE
   ANN. § 67-6-330(a)(17) (Supp. 2010)?
5. Are fees charged by [CENTER] for the use of towels, lockers, and outdoor equipment
   exempt pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010)?
6. Are the fees collected by [CENTER] for rentals of the facilities to non-exempt entities
   exempt pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010)?
   RULINGS
7. Yes. The fees for both full year and partial memberships in [CENTER] are exempt for
   purposes of the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp.
   2010).
8. TENN. CODE ANN. § 67-6-330(a)(17)(B) (Supp. 2010) requires that the exemption be
   approved by the Department of Revenue. The effective date of the exemption will be
   determined based on information provided in the application for exemption and is permitted
   to predate the filing of the exemption application.
9. Yes. The activation fees collected for photo identification cards are exempt for purposes of
   the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010).
10. Yes. The charges for guest passes to the [CENTER] facilities are exempt for purposes of the
    Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010).

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5. Yes. Fees charged by [CENTER] for use of towels, [CENTER] lockers, and outdoor
equipment are exempt for purposes of the Tennessee sales and use tax pursuant to TENN.
CODE ANN. § 67-6-330(a)(17) (Supp. 2010).

6. Yes. The charges for rentals of the [CENTER] facilities to non-exempt entities are exempt
   for purposes of the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17)
   (Supp. 2010).
   ANALYSIS
   The Tennessee Retailers’ Sales Tax Act, TENN. CODE ANN. § 67-6-101, et seq., imposes the sales
   and use tax on retail sales in Tennessee of tangible personal property and certain enumerated
   services. In addition, TENN. CODE ANN. § 67-6-212 (Supp. 2010) generally imposes the sales tax
   on admission charges, dues, and fees to various recreational activities and events, as well as on
   charges for the use of tangible personal property in such activities.
   1.

Membership fees

The fees for both full-year and partial memberships in [CENTER] are exempt for purposes of the
Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17) (Supp. 2010).
TENN. CODE ANN. § 67-6-212(a)(1) (Supp. 2010) imposes the Tennessee sales tax on the sales
price of “[d]ues or fees to recreation clubs,” including “any fees paid for the use of facilities or
services rendered at a health spa or club or any similar facility or business.” TENN. COMP. R. &
REGS. 1320-5-1-.116(3) (2000) (“Rule 116(3)”) provides that membership dues or fees “shall
include initiation fees … and any other fees required for membership.” [CENTER] is a sports
and fitness center that is properly characterized as a “health spa or club or any similar facility or
business” within the meaning of TENN. CODE ANN. § 67-6-212(a)(1).
Accordingly, the fees for both full-year and partial memberships in [CENTER] will be generally
subject to the Tennessee sales tax, unless a specific exemption from taxation applies. As
discussed below, the fees come within the scope of the exemption provided by TENN. CODE ANN.
§ 67-6-330(a)(17)(A) and are therefore exempt for purposes of the sales tax.2
Specifically, TENN. CODE ANN. § 67-6-330(a)(17)(A) exempts from the sales tax imposed by
TENN. CODE ANN. § 67-6-212 “[d]ues, membership application fees, admission fees,
contributions or rental charges for equipment paid to any corporation or enterprise that offers, on
a regular, full-time basis, services or facilities for the development or preservation of physical
fitness through exercise or athletics.” To qualify for the exemption, [CENTER] must also meet
the following requirements, which are set forth under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)(v): i) the enterprise must have at least one full-time employee certified in administering health
assessments, or at least one full-time employee licensed by the state that represents a medical
and/or paramedical discipline; ii) the facility must be open at least seventy hours per week; iii)
the enterprise must permit participation by each member each day in operation; iv) the facility
must have at least 15,000 square feet in use for physical fitness purposes; and v) the enterprise
2

Note that TENN. CODE ANN. § 67-6-330(a)(17)(B) disallows the exemption for any taxpayer that is listed under
Industry 7992 and Industry 7997 of the Standard Industrial Classification Index of 1987. The Taxpayer is not an
entity listed under either of these classifications.

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must offer three or more of the following programs and/or activities: health assessments that
include blood chemistry and urinalysis; racquetball; exercise equipment; track or swimming; and
aerobics.
Here, [CENTER] satisfies the initial set of requirements under TENN. CODE ANN. § 67-6330(a)(17)(A). First, the fees for both full year and partial memberships in [CENTER] are
properly characterized as dues, membership application fees, or admission fees. Second,
[CENTER] constitutes an enterprise that offers services or facilities for the development or
preservation of physical fitness through exercise or athletics. Third, such services and facilities
are offered on a regular, full-time basis.
[CENTER] also meets the additional requirements set forth under TENN. CODE ANN. § 67-6330(a)(17)(A)(i)-(v), as explained below.
TENN. CODE ANN. § 67-6-330(a)(17)(A)(i) requires that the enterprise have at least one full-time
employee certified in administering health assessments, or at least one full-time employee
licensed by the state that represents a medical and/or paramedical discipline. [CENTER]
employs a Fitness Director and a Director of [CENTER] as full-time professional staff members.
The Fitness Coordinator and the Director of [CENTER] are certified to perform health
assessments and physical fitness testing.
TENN. CODE ANN. § 67-6-330(a)(17)(A)(ii) requires that the facility be open at least seventy
hours per week. The facts indicate that [CENTER] satisfies this requirement. During the
[REDACTED TIME PERIOD], the facilities are open an average of 91 hours per week. At all
other times, the facilities are open an average of 85 hours per week.
TENN. CODE ANN. § 67-6-330(a)(17)(A)(iii) provides that the enterprise must permit
participation by each member each day in operation. The Taxpayer has indicated that [CENTER]
members are entitled to participate each day the facilities are open, although specific areas may
be closed for a certain period of time due to a special event or program. During the times a
specific area is closed for a special event or program, [CENTER] members have access to other
parts of the [CENTER] facilities. Accordingly, [CENTER] permits participation by each member
each day in operation.
TENN. CODE ANN. § 67-6-330(a)(17)(A)(iv) requires that the facility have at least 15,000 square
feet in use for physical fitness purposes. As indicated in the Facts section, above, these facilities
contain well in excess of 15,000 square feet of space dedicated to use for physical fitness
purposes.
TENN. CODE ANN. § 67-6-330(a)(17)(A)(v) provides that the enterprise must offer three or more
of the following programs and/or activities: health assessments that include blood chemistry and
urinalysis; racquetball; exercise equipment; track or swimming; and aerobics. The Taxpayer has
indicated that [CENTER] offers the following programs, activities, and equipment to its
members: racquetball; exercise equipment; a track for walking, jogging, and running; pools; and
aerobic and group exercise instruction. The Taxpayer therefore satisfies this final requirement.
Accordingly, the fees for both full-year and partial memberships in [CENTER] are exempt for
purposes of the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17).
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2.

Retroactive application of the exemption

The Taxpayer is precluded from claiming the exemption under TENN. CODE ANN. § 67-6330(a)(17)(A) until the Department has actually approved its claim of entitlement to exempt
status. TENN. CODE ANN. § 67-6-330(a)(17)(B) provides that “[b]efore any corporation or
enterprise can be exempted” under TENN. CODE ANN. § 67-6-330(a)(17)(A), the Department
“shall, based upon information supplied by the person claiming such exemption, approve such
exemption.”
However, if the application supports a determination by the Department that all statutory criteria
for exemption were satisfied prior to the application date, the Department can approve the
exemption with an effective date that is prior to the application date.
3.

Activation fees for photo identification cards

The activation fees collected for photo identification cards are exempt pursuant to TENN. CODE
ANN. § 67-6-330(a)(17).
TENN. CODE ANN. § 67-6-212(a)(1) imposes the Tennessee sales tax on the sales price of “[d]ues
or fees to recreation clubs,” including “any fees paid for the use of facilities or services rendered
at a health spa or club or any similar facility or business.” However, TENN. CODE ANN. § 67-6330(a)(17)(A) exempts from the sales tax imposed by TENN. CODE ANN. § 67-6-212 “[d]ues,
membership application fees, admission fees … paid to any corporation or enterprise that offers,
on a regular, full-time basis, services or facilities for the development or preservation of physical
fitness through exercise or athletics.” Rule 116(3) provides that membership dues or fees “shall
include initiation fees … and any other fees required for membership.” As discussed in the
response to Question #1, above, the requirements found under TENN. CODE ANN. § 67-6330(a)(17)(A)(i)-(v) must also be met for the exemption to apply.
Here, the activation fees collected for photo identification cards are properly characterized as
fees paid for the use of the [CENTER] facilities. Members who do not have a valid
[TAXPAYER] photo identification card are required to pay the fee to obtain a [CENTER] photo
identification card, which is used to gain scanned entry to the physical fitness areas. Thus, the fee
for the photo identification card is in essence a fee that is required for admission to the
[CENTER] facility; in accordance with Rule 116(3), the fee therefore constitutes a membership
fee.
Therefore, the activation fees collected for photo identification cards are subject to the Tennessee
sales tax pursuant to TENN. CODE ANN. § 67-6-212(a)(1). However, as explained in the response
to Question #1, membership and admission fees paid for the use of the [CENTER] facilities
come within the scope of the exemption under TENN. CODE ANN. § 67-6-330(a)(17)(A).
Additionally, [CENTER] meets the additional requirements found under TENN. CODE ANN. § 676-330(a)(17)(A)(i)-(v).
Thus, the fees collected for photo identification cards constitute membership or admission fees
that are exempt from the sales tax under TENN. CODE ANN. § 67-6-330(a)(17)(A), for the same
reasons discussed in the response to Question #1.
4.

Guest passes
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The charges for guest passes to the [CENTER] facilities are exempt for purposes of the
Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17).
TENN. CODE ANN. § 67-6-212(a)(1) imposes the Tennessee sales tax on the sales price of “[d]ues
or fees to recreation clubs,” including “any fees paid for the use of facilities or services rendered
at a health spa or club or any similar facility or business.” However, TENN. CODE ANN. § 67-6330(a)(17)(A) exempts from the sales tax imposed by TENN. CODE ANN. § 67-6-212 “[d]ues,
membership application fees, admission fees … paid to any corporation or enterprise that offers,
on a regular, full-time basis, services or facilities for the development or preservation of physical
fitness through exercise or athletics.” As discussed in the response to Question #1, above, the
requirements found under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)-(v) must also be met for
the exemption to apply.
Here, the charges for [CENTER] guest passes are properly characterized as fees paid for the use
of the [CENTER] facilities. Therefore, such charges are generally subject to the Tennessee sales
tax pursuant to TENN. CODE ANN. § 67-6-212(a)(1). However, as explained in the response to
Question #1, admission fees paid for the use of the [CENTER] facilities come within the scope
of the exemption under TENN. CODE ANN. § 67-6-330(a)(17)(A). Additionally, [CENTER] meets
the additional requirements found under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)-(v).
Thus, the charges for [CENTER] guest passes constitute admission fees that are exempt from the
sales tax under TENN. CODE ANN. § 67-6-330(a)(17)(A), for the same reasons discussed in the
response to Question #1.
5.

Charges for use of various items

Fees charged by [CENTER] for use of towels, lockers, and outdoor equipment are exempt for
purposes of the Tennessee sales and use tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17)
(Supp. 2010).
1) Outdoor equipment
Fees charged by [CENTER] for use of outdoor equipment are exempt for purposes of the
Tennessee sales and use tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17).
TENN. CODE ANN. § 67-6-212(a)(4) imposes the Tennessee sales tax on the sales price of
“[c]harges made for the privilege of using tangible personal property for amusement, sports,
entertainment, or recreational activities such as trampolines, golf carts, bowling shoes, skates or
other sports and athletic equipment.” The outdoor equipment is tangible personal property used
for such activities. Thus, charges for the use of these items are generally subject to the Tennessee
sales tax under TENN. CODE ANN. § 67-6-212(a)(4).
However, TENN. CODE ANN. § 67-6-330(a)(17)(A) exempts from the sales tax imposed by TENN.
CODE ANN. § 67-6-212 “rental charges for equipment paid to any corporation or enterprise that
offers, on a regular, full-time basis, services or facilities for the development or preservation of
physical fitness through exercise or athletics.” As discussed in the response to Question #1,
above, the requirements found under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)-(v) must also be
met for the exemption to apply.

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Here, the outdoor equipment is properly characterized as “equipment” offered by [CENTER] for
use in amusement, sports, entertainment, or recreational activities. Additionally, as discussed in
the response to Question #1, [CENTER] meets the additional requirements found under TENN.
CODE ANN. § 67-6-330(a)(17)(A)(i)-(v). Accordingly, fees charged by [CENTER] for use of the
outdoor equipment are exempt for purposes of the Tennessee sales and use tax pursuant to TENN.
CODE ANN. § 67-6-330(a)(17).
2) Lockers and towels
Charges for the use of towels and lockers constitute fees that are exempt from the sales tax under
TENN. CODE ANN. § 67-6-330(a)(17)(A).
TENN. CODE ANN. § 67-6-212(a)(1) imposes the Tennessee sales tax on the sales price of “[d]ues
or fees to recreation clubs,” including “any fees paid for the use of facilities or services rendered
at a health spa or club or any similar facility or business.” (Emphasis added.) However, TENN.
CODE ANN. § 67-6-330(a)(17)(A) exempts from the sales tax imposed by TENN. CODE ANN. §
67-6-212 “[d]ues, membership application fees, admission fees … paid to any corporation or
enterprise that offers, on a regular, full-time basis, services or facilities for the development or
preservation of physical fitness through exercise or athletics.” As discussed in the response to
Question #1, above, the requirements found under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)-(v)
must also be met for the exemption to apply.
Here, charges for the use of towels and lockers are properly characterized as fees paid for the use
of the [CENTER] facilities. Therefore, such charges are generally subject to the Tennessee sales
tax pursuant to TENN. CODE ANN. § 67-6-212(a)(1). However, as explained in the response to
Question #1, fees paid for the use of the [CENTER] facilities come within the scope of the
exemption under TENN. CODE ANN. § 67-6-330(a)(17)(A). Additionally, [CENTER] meets the
additional requirements found under TENN. CODE ANN. § 67-6-330(a)(17)(A)(i)-(v).
Thus, the charges for the use of towels and lockers constitute fees that are exempt from the sales
tax under TENN. CODE ANN. § 67-6-330(a)(17)(A), for the same reasons discussed in the
response to Question #1.
6.

Rentals of the [CENTER] facilities

Charges for rentals of the [CENTER] facilities to non-exempt entities are exempt for purposes of
the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-330(a)(17).
As discussed above, TENN. CODE ANN. § 67-6-212(a)(1) imposes the Tennessee sales tax on the
sales price of “[d]ues or fees to recreation clubs,” including “any fees paid for the use of facilities
or services rendered at a health spa or club or any similar facility or business.” However, TENN.
CODE ANN. § 67-6-330(a)(17)(A) exempts from the sales tax imposed by TENN. CODE ANN. §
67-6-212 “[d]ues, membership application fees, admission fees … paid to any corporation or
enterprise that offers, on a regular, full-time basis, services or facilities for the development or
preservation of physical fitness through exercise or athletics.”
Here, charges made to non-exempt entities renting the [CENTER] facilities are properly
characterized as fees paid for the use of the facilities. Therefore, such charges are generally
subject to the Tennessee sales tax pursuant to TENN. CODE ANN. § 67-6-212(a)(1). However, as
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explained in the response to Question #1, admission fees paid for the use of the [CENTER]
facilities come within the scope of the exemption under TENN. CODE ANN. § 67-6-330(a)(17)(A).
Additionally, [CENTER] meets the additional requirements found under TENN. CODE ANN. § 676-330(a)(17)(A)(i)-(v).
Thus, the charges for rentals of the [CENTER] facilities constitute admission fees that are
exempt from the sales tax under TENN. CODE ANN. § 67-6-330(a)(17)(A), for the same reasons
discussed in the response to Question #1.

Kristin Husat
Senior Tax Counsel

APPROVED:

Richard H. Roberts
Commissioner of Revenue

DATE:

6/9/11

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