Small gym owners, lawmakers fight "amusement tax" in Tennessee

CrossFit 423

BRISTOL, Tenn. --- A little-known tax could be making it more expensive for you to exercise in Tennessee.

Owners of small gyms are joining lawmakers in a fight to end an "amusement tax" on gym memberships in Tennessee. The 10 percent tax only affects gyms smaller than 15,000 sq. ft.

"One of the most unhealthy states in the United States shouldering an amusement tax that taxes wellness is a little backwards," said Taryn Hayden of CrossFit 423 in Bristol, Tenn.

For decades, the tax went unenforced by the Dept. of Revenue. Then, last June, gym owners were told they retroactively owed taxes to the state.

For CrossFit 423, that meant $20,000.

"It's a tax directly handed to the member, which turns into a tax on wellness," Hayden said.

According to a study by The Commonwealth Fund, 38 percent of kids in Tennessee are overweight or obese. That's the highest in the country.

The Center for Disease Control says 36 percent of adults are overweight and 21 percent are obese.

"To tax us for that contribution to our health, which of course has immediate effects on our health care and other types of societal health, that's money not well-spent," said Patrick Manning, a member of CrossFit 423.

Eric Lewelling launched E-Fit Training and Nutrition in Johnson City as a personal training service to escape the amusement tax.

"There's a lot of things I think we could tax in this world," Lewelling said. "Health, longevity and good livelihood shot not be one of those."

Bills in the Tennessee House and Senate would exempt small gyms from the amusement tax.

The change, according to the General Assembly, would result in a loss of $21 million in state revenue and $8.6 million in local revenue.

Sen. Jon Lundberg (R-Bristol) is supportive of eliminating the amusement tax on gyms.

"Ronald Reagan once said, 'If you want less of something, tax it!'" Lundberg told WCYB. "In a state where we have an incredibly high obesity rate, we have very high diabetes rates, we want to incentivize people to go to gyms and live a healthier lifestyle."

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