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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 9. TAXATION AND ASSESSMENTS |
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Chapter 9-4. SALES AND USE TAXES |
Section 9-427. HEALTH-CLUB SERVICES
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427.1 The sale of or charge for the services of a health club subject to sales and use tax.
427.2 Health-club means a fitness club, fitness center, or gym the purpose of which is physical exercise, and includes the use of, access to, or membership to, an athletic club, fitness center, gym, recreational sports facilities featuring exercise and other active physical fitness conditioning or recreational sports activities including swimming, skating, or racquet sports, or other facility for the purpose of physical exercise.
427.3 Charges for sale of or charge for the services of a health club include any amounts paid to participate, enter, use, or access the health club, including but not limited to membership dues, drop-in fees, and entrance fees.
427.4 Charges for the use of facilities for non-fitness-related purposes, including room rentals, or for other services or charges covered by a separate contract with the user, such as a lease or occupancy agreement, are not subject to tax.
427.5 As sales by nonprofit organizations are not granted a general sales tax exemption, sales by nonprofit organizations of the services of a health club will be subject to tax unless the purchaser holds a valid exemption or resale certificate.
427.6 Examples of taxable charges for health-club services include, but are not limited to:
(a)A monthly membership to a fitness center to use and access the fitness center’s strength training equipment.
(b)A daily entrance fee to a tennis club for access to the club’s tennis courts.
(c)A charge for a multi-lesson pass to a yoga studio for access to classes with the studio’s yoga instructors.
(d)A gate charge to recreational center for use of the recreation center’s rock climbing area.
(e)A drop-in charge at gymnasium for participation in a group fitness class.
(f)A charge by a fitness center for personal training services performed at the fitness center by an employee of the fitness center.
427.7 Charges which do not constitute health-club services are not subject to sales tax. For example, if:
(a)A business organizes a ‘Get Fit Challenge’ for its employees, charging each participating employee dues, the fees collected will not be subject to tax.
(b)A gym charges fees for a lounge pool membership, where the lounge pool membership is not for physical exercise, such fee will not be subject to tax.
(c)A spa charges clients for services which are not fitness-related, such fees will not be subject to tax.
427.8 Where a personal trainer is hired by an individual to perform fitness related services outside of a health club, the fees collected will not be subject to tax.
427.9 Whether acting as an employee or independent contractor, when a personal trainer is hired to perform fitness related services at a health club, regardless of who owns the health club, any fees collected will be subject to tax.
427.10The entire bundled charge for both taxable health-club services and nontaxable services will be presumed taxable if a primary purpose of the transaction is the sale of the taxable health-club services.
(a) This presumption may be overcome by the health-club services provider at the time of the transaction by separately stating to the customer a reasonable charge for the taxable services.
(b) The service provider's books must support the apportionment between taxable and nontaxable services based on the cost of providing the service or on a comparison to the normal charge for each service if provided alone.
(c) If the charge for nontaxable services is unreasonable when considering the cost of providing the service or a comparable charge made in the industry for each service, the Deputy Chief Financial Officer will adjust the charges and assess additional tax, penalty, and interest on the taxable services.