Were stand-alone fitness evaluations, individualized nutrition programs, grocery-store instruction, and appointment-only personal training taxable Texas amusement services?

Plain-English summary

Under the fuller facts presented in the May 23 letter, the separately sold initial fitness evaluation was instructional and not a taxable amusement service. It cost $39, required no other purchase, and was used to build a personalized program only if the customer chose one.

The individualized nutrition analysis and plan, sold on a stand-alone basis for $60, was a nontaxable personal service. The separate $60 one-on-one grocery-store tour was also nontaxable instruction.

Appointment-only fitness sessions at the provider's facility were personal instruction rather than taxable amusement. Each customer used a private workout room with a trainer who taught techniques and recorded performance; customers could not use the facility freely as at a typical health club.

The attached March 30 letter had reached a different result for facility-based training and related evaluations before those operational facts were supplied. That earlier letter also classified separately charged tanning and massage sessions as nontaxable and said real-property rent paid by the massage therapist was not subject to sales tax.

Common questions

Was the stand-alone fitness evaluation taxable? No under the May 23 clarified facts.

Were the nutrition plan and grocery-store tour taxable? No.

Was appointment-only one-on-one training at the provider's facility taxable? No; it was personal instruction.

Were tanning and massage taxable under the attached March letter? No.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9005L1022A01

Original ruling text

May 23, 1990

Dear **:

I have received your second request for a ruling on your client's fitness and
conditioning program.

In our letter to you dated March 30, 1990, we ruled that the initial fitness
exam, which includes evaluations of cardiovascular condition, body fat
percentage, flexibility, muscular strength, body measurements and the
individual client's fitness goal, is taxable when it is directly related to the
purchase of a taxable service, i.e., the fitness training sessions.

This initial evaluation costs $39, and there is no requirement that any other
service or examination be purchased. The exam is used to formulate a
personalized fitness program if the client so chooses. It is my opinion that
this evaluation is instructional in nature and is not a taxable amusement
service.

Your client's nutrition program, which is also offered on a stand-alone basis,
costs $60. Once again, there are no other purchase requirements. This program
is also personalized; the customer's eating habits are analyzed for a six-day
period. Daily intakes of calories and fats are calculated and a program is
developed to allow the customer to reach his or her weight goal over a period
of time. An appointment is then set to discuss the nutrition program and any
changes in eating habits that need to be made.

In addition, a grocery store tour which involves a one-on-one, aisle-by-aisle
discussion with the client on how to choose proper low-fat and low-calorie
foods can be purchased for an additional $60.

Both parts of the nutrition program qualify as instructional nontaxable
personal services.

Concerning the fitness training sessions, I agree that the focus should be on
the content of these sessions. In our first letter we ruled that the charge for
the sessions would be exempt if they were held at the customer's residence or
business.

The format of the fitness training program differs from the ones in use in the
majority of fitness centers or health clubs. The client can use the facilities
only at set appointment times, with an instructor/trainer in attendance. Most
fitness centers allow unlimited use and the client can work out alone. The
client uses a private workout room and the program is designed for each client,
based on the initial fitness evaluation. The instructor teaches proper workout
techniques and records the client's performance.

These training sessions constitute personal instruction and are not taxable
amusement services.

This opinion is based on the facts presented. If there are additional facts, or
if the circumstances change, the opinion may change.

Please write or call if you have any questions. You can call toll-free at
800-531-5441. Our regular number is 512-463-3830 and our FAX number is
512-475-0900.

Sincerely,

Larry Koenig
Taxability Section
Legal Services Division

March 30, 1990

Dear **:

This is in response to your letter concerning the taxability of your client's
fitness and related services. I have restated each service and their taxability
below.

INITIAL FITNESS EVALUATION

Situation: This is a separately stated charge for evaluation of a client's
cardiovascular condition, body fat percentage, flexibility, muscular strength,
body measurements, and fitness goal. There is no obligation for further
services or participation nor is the client entitled to other services or
participation. Your client does not employ any medical doctors.

Response: The separately stated charge for the initial fitness evaluation is
taxable when it is directly related to the purchase of a taxable service as
described below.

PERSONALIZED FITNESS TRAINING SESSIONS

Situation: This is a separately stated, per hour charge for one on one (one
trainer and one client) physical conditioning. The conditioning includes
lifecycle, floor exercises, calisthenics, and weight training. The
conditioning may be conducted either at your clients facility or at their
client's home or office.

Response: This separately stated charge is taxable as an amusement when
conducted at your client's facility. Your client's facility with its exercise
equipment is considered a health club for this purpose. If this program is
conducted at your clients facility the initial fitness evaluation is also
taxable.

The charge for personal instruction done at a customer's home or office, where
the customer's facilities are used, is not taxable. In this second case the
charge is only for instruction.

NUTRITION PROGRAM

Situation: This optional, separately stated program consists of a nutrition
evaluation and design of a nutrition or diet plan for the individual client. A
booklet of nutrition articles, recipes, and a balanced nutrition plan including
foods to eat and diet supplements (if recommended) is provided. The program
may, at an additional charge, include a trip to a grocery store for an
aisle-by-aisle discussion of purchases.

Response: This nutritional program including the grocery store visit, like the
initial fitness evaluation, is taxable when related to the sale of a taxable
service. If the nutritional program by itself is offered to the public or if it
can be shown that the nutrition plan is designed only for an individual (as
opposed to everyone who needs a low fat plan getting the same plan), then this
issue may be reconsidered.

TANNING SESSIONS

Situation: separately stated charges are made for the use of a tanning
facility.

Response: Separately stated charges for tanning services are not taxable.

MASSAGE SESSIONS

Situation: Separately stated charges are made for massage sessions. The massage
sessions are conducted by a massage therapist whose relationship with the
facility is that of a independent contractor. The massage therapist pays a fee
for the use of the facility. Customer fees are paid either directly to the
therapist or in the case of a credit card payment is made to the facility with
the facility retaining only bank charges.

Response: Massage services at a health club are not subject to sales tax.

Real property rents which the massage therapist pays directly to the facility
provider are not subject to sales tax.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call our toll-free
number 1-800-252-5555. The regular number is 512/463-4684. You may write me at
the Tax Correspondence Division.

Sincerely,

Curt Swenson
Tax Correspondence Division