Are a fitness club's membership dues, personal-training fees, and massage-therapy fees subject to New York State and New York City sales tax?

Plain-English summary

Manhattan Athletic Club offers over 100 exercise stations, fitness classes (boxing, yoga, "healthy back and stretch"), golf instruction, mini basketball leagues, and both personal training and massage therapy for an extra fee. Its members pay an initiation fee and monthly dues that cover facility use and all classes; personal training and massage cost extra. Members have no say in management, no role in choosing new members, and no ownership interest in the club — the size of the membership is capped purely by the physical capacity of the facility.

The Department worked through three separate charges:

Membership dues and initiation fees. New York taxes "dues paid to any social or athletic club" — but only if the business is actually a "club or organization" in the legal sense, meaning members have real control over social/athletic activities, elections, member selection, or management, or hold a proprietary interest. Manhattan Athletic Club's members have none of that; the owner runs everything. So the club isn't a taxable "social or athletic club" at all, and separately, the dues are charges for the use of facilities for sports in which the patron is a participant (specifically excluded from the admission-charge tax, the same exclusion covering bowling alleys and swimming pools). Both routes lead to the same result: no State sales tax and no New York City sales tax on dues or the initiation fee.

Personal training. New York City's local sales tax on gyms, health salons, and similar establishments covers a specific list of services — beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis, massage, and services "similar" to those — plus charges for using weight-control-salon/gym-type facilities. Personal training isn't on that list and isn't similar to it, and since the club as a whole is a full-service athletic facility (not a "weight control salon" or "gymnasium" in the narrower, tax code sense), personal-training fees escape both the City tax and the State's general enumerated-services tax.

Massage therapy. Massage is specifically named in the New York City local tax on gyms/salons, and it's taxed unless performed by a licensed medical professional (physician, chiropractor, podiatrist, osteopath, etc.) treating a medical condition. The club's massage sessions aren't medical in nature, so they're subject to New York City's local sales tax — though, because massage isn't among the services New York State taxes generally under § 1105(c), they still escape State sales tax.

What this means for you

Gym, fitness club, and athletic facility operators

Whether your dues are taxable club dues turns on real member control and ownership, not on labeling — and separately, charges for use of facilities where the patron personally exercises or plays can independently escape tax as participant-sport charges. Check both angles.

Clubs offering add-on personal training or massage

Personal training and massage aren't treated the same way in New York City: personal training generally escapes both State and City sales tax, while massage (when not medical) is specifically taxed by New York City even though it stays exempt from the broader State sales tax.

Accountants and tax professionals

This opinion is a clean template for unbundling a multi-service fitness facility's charges: run the club/organization test on dues, the participant-sporting-facility exclusion as a backstop, and separately check each add-on service against New York City's specific enumerated list in Administrative Code § 11-2002(h) and Tax Law § 1212-A.

Common questions

Q: Are gym membership dues automatically taxable in New York?
A: No — only if the business is a genuine "social or athletic club" where members control activities/management or hold an ownership interest. A gym run entirely by its owner, with members having no such control, isn't a taxable club.

Q: Is a personal-training fee taxed the same as a massage fee?
A: No. Personal training isn't on New York City's specific taxable-services list for gyms/salons and stays untaxed at both the State and City level. Massage is specifically listed and is taxed by New York City unless it's medical in nature.

Q: Does a medical exception apply to spa-style massage at a gym?
A: Only if the massage is performed by a licensed medical professional (physician, chiropractor, osteopath, podiatrist, etc.) as part of medical treatment — general wellness massage at a fitness club doesn't qualify.

Citations and references

Statutes and regulations:

• Tax Law § 1105(c) (enumerated services tax); § 1105(f)(1) (admission charge tax; sporting-participant exclusion); § 1105(f)(2) (social/athletic club dues tax)
• Tax Law § 1107(a) (additional NYC sales tax); § 1212-A(a)(2) (NYC local tax on beauty/massage/gym services)
• Administrative Code of the City of New York § 11-2002(h)
• 20 NYCRR § 527.11(b) (club/organization and athletic club definitions)

Prior rulings and cases referenced:

• New York Health and Racquet Club, TSB-A-99(26)S
• Matter of Prospect Park Health and Racquet Associates, TSB-D-97(30)S
• Carapan, Inc., TSB-A-93(40)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_43s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(43)S
Sales Tax
July 26, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S010919A

On September 19, 2001, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Manhattan Athletic Club LLC, 277 Park Avenue, New York, NY 10017.
The issue raised by Petitioner, Manhattan Athletic Club LLC , is whether, the fees charged
for the use of its facilities and additional fees charged for personal training and massage services are
subject to New York State and local sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner, which does business as the Manhattan Athletic Club, provides a variety of
participant sport and fitness activities at its facility in New York City. Petitioner offers over 100
specialized exercise stations, including treadmills, weight lifting equipment, exercise bicycles,
stepping machines, new member fitness evaluations, exercise classes including boxing, traditional
yoga and Iyengar yoga classes, and classes on “healthy back and stretch”. In addition, petitioner
provides certified fitness trainers, golf instruction, mini full-court basketball with corporate leagues,
aerobic classes and massage therapy sessions.
Petitioner charges an initiation fee and monthly membership dues for use of its facility.
There are no extra charges for classes offered. Members must pay extra fees for personal training
services and massage therapy sessions. Petitioner’s members do not control any social or athletic
activities. Petitioner’s members do not participate in the selection of members or management of
the Manhattan Athletic Club. The members do not possess any proprietary interest in Petitioner.
The number of members is restricted solely because of the physical size of the facility.
Applicable Law and Regulations
Section 1105(c) of the Tax Law imposes tax upon the receipts from every sale, except for
resale, of certain enumerated services.
Section 1105(f) of the Tax Law imposes sales tax, in part, on:
(1) Any admission charge . . . except charges to a patron for admission to,
or use of, facilities for sporting activities in which such patron is to be a participant,
such as bowling alleys and swimming pools . . . .

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(2)(i) The dues paid to any social or athletic club in this state if the dues . . .
are in excess of ten dollars per year, and on the initiation fee alone, regardless of the
amount of dues, if such initiation fee is in excess of ten dollars . . . .
Section 1107(a) of the Tax Law provides:
General. On the first day of the first month following the month in which a
municipal assistance corporation is created under article ten of the public authorities
law for a city of one million or more, in addition to the taxes imposed by sections
eleven hundred five and eleven hundred ten, there is hereby imposed on such date,
within the territorial limits of such city, and there shall be paid, additional taxes, at
the rate of four percent, which except as provided in subdivision (b) of this section,
shall be identical to the taxes imposed by sections eleven hundred five and eleven
hundred ten. Such sections and the other sections of this article, including the
definition and exemption provisions, shall apply for purposes of the taxes imposed
by this section in the same manner and with the same force and effect as if the
language of those sections had been incorporated in full into this section and had
expressly referred to the taxes imposed by this section.
Section 1212-A(a)(2) of the Tax Law authorizes the City of New York to impose a local
sales tax at the same uniform rate, but at a rate not to exceed four per centum, on "beauty, barbering,
hair restoring, manicuring, pedicuring, electrolysis, massage services and similar services, and 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 . . . but excluding services
rendered by a physician, osteopath, dentist, nurse, physiotherapist, chiropractor, podiatrist,
optometrist, ophthalmic dispenser or a person performing similar services licensed under title VIII
of the education law . . .;" such tax to be administered and collected by the Commissioner of
Taxation and Finance.
Section 11-2002(h) of the Administrative Code of the City of New York imposes sales tax,
in part, on:
(h) Receipts from . . . massage services and similar services, and 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 . . . .
Section 527.11(b) of the Sales and Use Tax Regulations provides, in part, the following
definitions of terms that are contained in section 1105(f)(2) of the Tax Law:
(5) Club or organization. (i) The phrase club or organization means any
entity which is composed of persons associated for a common objective or common
activities. Whether the organization is a membership corporation or association or

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business corporation or other legal type of organization is not relevant. Significant
factors, any one of which may indicate that an entity is a club or organization, are:
an organizational structure under which the membership controls social or athletic
activities, tournaments, dances, elections, committees, participation in the selection
of members and management of the club or organization, or possession by the
members of a proprietary interest in the organization. The organizational structure
may be formal or informal. (Emphasis supplied)
(ii) A club or organization does not exist merely because a business entity:
(a) charges for the use of facilities on an annual or seasonal basis,
even if an annual or season pass is the only method of sale and provided such
passes are sold on a first-come, first-served basis;
(b) restricts the size of the membership solely because of the physical
size of the facility. Any other type of restriction may be viewed as an
attempt at exclusivity;
(c) uses the word club or member as a marketing device;
(d) offers tournaments, leagues and social activities which are
controlled solely by the management.
*

*

*

(7) Athletic club. (i) An athletic club is any club or organization which has
as a material purpose or activity the practice, participation in or promotion of any
sports or athletics.
*

*

*

(ii) Athletic activities does not include exercising or calisthenics solely for
health or weight reduction purposes, as contrasted to sports. An establishment that
merely provides steam baths, saunas, rowing machines, shaking machines and other
exercise equipment shall not be considered an athletic club. However, there is a
four-percent local sales tax in the city of New York on every sale of services by
weight control salons, health salons, gymnasiums, turkish baths, sauna baths and
similar establishments, and on every charge for the use of such facilities.

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Opinion
Petitioner’s charges to its patrons entitle them to use facilities for sporting activities in which
the patron is to be a participant. Petitioner’s initiation fee and monthly membership dues for use of
the facility, therefore, are not subject to the tax on admission charges under Section 1105(f)(1) of
the Tax Law. Petitioner’s initiation fee and monthly membership dues would be subject to sales tax
under Section 1105(f)(2) of the Tax Law if Petitioner operated an athletic club as defined in
paragraphs (5) and (7) of Section 527.11 of the Sales and Use Tax Regulations.
Petitioner’s members do not control any social or athletic activities, do not participate in the
selection of members or club management, or possess any proprietary interest in Petitioner.
Therefore, Petitioner is not operating an athletic club as defined in paragraphs (5) and (7) of
Section 527.11 of the Sales and Use Tax Regulations. Accordingly, Petitioner’s charges to its
members for initiation fees and monthly membership dues are not subject to tax as dues paid to an
athletic club under Section 1105(f)(2) of the Tax Law.
Since Petitioner provides a variety of sporting activities and facilities to its members,
Petitioner’s facilities are not weight control salons, gymnasiums or other establishments described
in Section 11-2002(h) of the Administrative Code of the City of New York. Petitioner’s charges to
its members for initiation fees and monthly membership dues, therefore, are not for services
provided by, or use of facilities in, weight control salons, gymnasiums or other establishments
described in such Section 11-2002(h) and are thus not subject to that tax. See New York Health and
Racquet Club, Adv Op Comm T & F, May 19, 1999 TSB-A-99(26)S; Matter of Prospect Park
Health and Racquet Associates and Peter J. Sferrazza and George Hart, as Partners, Dec Tax App
Trib, July 22, 1997, TSB-D-97(30)S.
Petitioner also offers its members personal training services and massage therapy sessions
for an additional fee. The additional fee for massage therapy sessions are receipts for services
subject to New York City sales tax provided for in Section 1212-A of the Tax Law and Section
11-2002(h) of the New York City Administrative Code. Massage services which are provided by
a physiotherapist, chiropractor, podiatrist, osteopath, or any person authorized to practice medicine,
licensed under Title VIII of the Education Law may be excluded from New York City sales tax if
the services are medical in nature, as are the services provided by the categories of professionals
enumerated in Section 1212-A of the Tax Law and Section 11-2002(h) of the Administrative Code.
However, the massage services provided by Petitioner are not medical in nature and do not
qualify for the exclusion. See Carapan, Inc., Adv Op Comm T&F, June 21, 1993, TSB-A-93(40)S.
Personal training services are not included in the services of beauty, barbering, hair restoring,
manicuring, pedicuring, electrolysis, and massage services that are enumerated as taxable services
in Section 11-2002(h) of the New York City Administrative Code and are not similar to such
services. Accordingly, an additional fee for personal training services would only be subject to the
New York City sales tax as a charge for services sold by a weight control salon, health salon,
gymnasium, turkish and sauna bath or similar establishments, or as a charge for the use of such

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facilities. Since Petitioner’s facility is not a weight control salon, gymnasium or similar
establishment, and personal training services are not similar to the enumerated services in Section
11-2002(h) of the New York City Administrative Code, the fee for personal training services is not
subject to the New York City tax. Section 1105(c) of the Tax Law imposes New York State sales
tax on the receipts from certain enumerated services. Since massage services and personal training
services are not included within the services taxed under Section 1105(c) of the Tax Law, the
receipts from massage services and personal training services are not subject to the New York State
sales tax.
Accordingly, the initiation fee, monthly membership dues and additional fee for personal
training services are not subject to any of the taxes imposed under Sections 1105(c), 1105(f)
and 1107 of the Tax Law or Section 11-2002(h) of the New York City Administrative Code. The
additional fee for massage therapy sessions is subject to the tax imposed under Section 11-2002(h)
of the New York City Administrative Code, but is not subject to the tax imposed under Section
1105(c) of the Tax Law.

DATED: July 26, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.