For a large health club charging an initiation fee plus per-service fees for things like personal training, spa treatments, child care, and locker rentals, which specific charges are subject to New York State or New York City sales tax?

Plain-English summary

The Sports Club/LA-Upper East Side, a large Manhattan health club with weight equipment, courts, studios, a pool, and a rock-climbing wall, previously won a ruling (Pontius Realty, 2000) establishing that it isn't a "social or athletic club" subject to dues tax, and isn't a "gymnasium" or "health salon" subject to New York City's local service tax, because members have no say in club governance and membership is capped only by facility size. This new opinion applies that same baseline to a long list of specific member charges — personal training, fitness workshops, sports leagues, private lessons, guest fees, lost card/key replacement fees, child care and child care programs, spa services, and locker rentals.

Sorting through them:

• Not taxable at all (neither state sales tax under § 1105(c) nor NYC's § 11-2002(h) local service tax): initiation fees, monthly dues, personal training, fitness/wellness workshops, sports leagues, private sports lessons, guest fees, child care, and child care programs. None of these fit the enumerated taxable-services list, and the club itself isn't a taxable "gymnasium" or "weight control salon."
• Excluded as participant-sport admissions: guest fees and sports league fees for activities in which the payer is a participant (not a spectator) are affirmatively excluded from the general amusement-admission tax.
• Not taxable — indemnification, not a sale: fees to replace lost membership cards or locker keys are treated as reimbursement for the club's replacement cost, not a sale of tangible property to the member (though the club itself must pay sales tax when it buys the cards/keys).
• Taxable — state and local: locker rental fees are a taxable "storage" service under § 1105(c)(4), carrying both New York State and local sales tax.
• Taxable — NYC local tax only: spa services (massage, facials, manicures, body treatments) performed by non-medical staff are subject to New York City's local service tax under § 1212-A/§ 11-2002(h), even though they escape New York State sales tax entirely, because massage and similar services performed by non-medical personnel are specifically enumerated in the City's local statute. (Massage performed by a licensed medical professional like a physiotherapist or chiropractor could be excluded as medical in nature — but this club's massage isn't.)

What this means for you

Health club and gym operators

Don't assume "we're not a taxable gymnasium" (per your own prior favorable ruling) means every fee you charge is automatically untaxed — locker rentals and non-medical spa/massage services carry their own separate tax exposure (state+local for lockers; NYC-only for massage/spa) regardless of your club's overall classification.

Multi-service fitness/wellness businesses

Sort your fee schedule line by line against this same framework: participant-sport-adjacent fees (training, lessons, leagues, guest access) tend to fall outside the tax net; storage-type fees (lockers, safe deposit) are taxable; and personal-care services like massage/facials trigger NYC's local service tax specifically, independent of whether your facility itself is a taxable "gymnasium."

Accountants advising clubs and studios

The NYC-local-tax-only category (spa/massage by non-medical staff) is an easy one to miss since it doesn't show up in the New York State sales tax analysis at all — make sure NYC-based clients are separately tracking and remitting this local tax on those specific service lines.

Common questions

Q: Are health club membership dues automatically taxable?
A: Only if the club qualifies as a "social or athletic club" under the regulatory test (member control of governance/activities, proprietary interest, or exclusivity beyond facility-size limits). A club where members have no such control and membership is capped only by facility size isn't an athletic club for this purpose.

Q: Are locker rental fees taxable?
A: Yes — locker rentals are taxed as a "storage" service under state and local sales tax, regardless of the club's own tax classification.

Q: Is spa/massage revenue taxed the same as the rest of the club's services?
A: No — non-medical massage and spa services are specifically subject to New York City's local service tax (even where the state sales tax doesn't apply), unless performed by a licensed medical professional practicing medically.

Q: Does this ruling apply to any health club?
A: This is a fact-specific Advisory Opinion binding only on this petitioner, building on its own prior 2000 ruling establishing it isn't an athletic club or gymnasium. Clubs with different governance structures, membership restrictions, or service menus need their own analysis.

Citations and references

• Tax Law § 1105(c)(4) (storage/locker rental services)
• Tax Law § 1105(f)(1), (2) (admission charges; participant-sports exclusion; social/athletic club dues)
• Tax Law § 1107(a) (additional NYC tax parallel to §§ 1105/1110)
• Tax Law § 1212-A(a)(2) (NYC local tax on beauty/gymnasium/health-salon services)
• NYC Administrative Code § 11-2002(h) (NYC tax on weight-control salons, gymnasiums, massage, etc.)
• 20 NYCRR § 527.10(d)(4) (participant sporting-facility exclusion)
• 20 NYCRR § 527.11(b) (athletic club/dues definitions)
• Pontius Realty, Inc., Adv Op Comm T&F, May 31, 2000, TSB-A-00(26)S
• William A. Barrett, Adv Op Comm T&F, Oct. 9, 2003, TSB-A-03(38)S
• Dr. Joan Coff, Adv Op Comm T&F, May 26, 2005, TSB-A-05(17)S
• Dianne C. Hoffman, C.P.A., Adv Op Comm T&F, Dec. 27, 1993, TSB-A-93(64)S
• Country Club Partners, LLC, Adv Op Comm T&F, May 30, 2006, TSB-A-06(15)S
• Pro Net, Inc., Adv Op Comm T&F, Oct. 2, 1991, TSB-A-91(65)S
• Carapan, Inc., Adv Op Comm T&F, June 21, 1993, TSB-A-93(40)S
• Whitestone Services, Inc., Adv Op Comm T&F, Feb. 28, 1996, TSB-A-96(12)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2008.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a08_10s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-08(10)S
Sales Tax
February 14, 2008

Office of Tax Policy Analysis
Taxpayer Guidance Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S070621A

On June 21, 2007, the Department of Taxation and Finance received a Petition for
Advisory Opinion from MP Sports Club Upper Eastside LLC, 172 Tremont Street, Third Floor,
Boston, MA 02111. Petitioner, MP Sports Club Upper Eastside LLC, provided additional
information with respect to the Petition on November 7, 2007.
The issue raised by Petitioner is whether various charges to its members and others are
subject to sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner, doing business as The Sports Club/LA-Upper East Side, is a health club that
provides a variety of fitness and participant sporting activities at its facilities at 330 East 61st
Street in New York City. Petitioner offers traditional cardiovascular and weight-training
equipment such as treadmills, bikes, stair climbers, rowing machines, and Nautilus machines.
Additionally, the facility has squash, basketball, volleyball, and indoor soccer courts; yoga,
pilates, boxing, and group-cycling studios; a swimming pool; a rock-climbing wall; and various
classes available to members.
Petitioner charges an initiation fee and monthly membership dues for the use of its
facility. Members must pay additional fees for special services, such as personal training, sports
lessons, and spa sessions. The members do not possess any proprietary interest in Petitioner and
do not control social or athletic activities or participate in the selection of members or
management of the club. The number of members is restricted solely due to the physical size of
the facility.
It was previously determined that charges for the use of this facility were not subject to
tax as dues to an athletic club under section 1105(f)(2) of the Tax Law and that the facility was
not a weight control salon, gymnasium, or other establishment described in section 11-2002(h) of
the Administrative Code of the City of New York. (See Pontius Realty, Inc., Adv Op Comm
T&F, May 31, 2000, TSB-A-00(26)S). Petitioner states that the facts as submitted for the
previous Advisory Opinion are still representative of the manner in which it conducts its
business.
The various services that Petitioner provides to its members for additional charges are
described as follows:

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Sales Tax
February 14, 2008
•

Personal Training- Petitioner, for additional fees, offers personal training sessions
either on a one-on-one basis or as group sessions. Sessions are sold either
individually or in packages of multiple sessions.

•

Fitness and Wellness Workshops- In addition to personal training, for additional
fees Petitioner offers a myriad of specialized workshops, such as triathlon training
workshops, yoga and pilates workshops, and stretching.

•

Sports Leagues- Petitioner, for additional fees, also has sports leagues, such as
basketball and soccer leagues, open to members and nonmembers who pay to join
the league during a season.

•

Private Sports Lessons- Petitioner also, for an additional fee, offers lessons and
clinics in a variety of sporting activities including boxing, running, volleyball,
martial arts, swimming, basketball, soccer, and racquet sports.

•

Guest Fees- When nonmembers visit Petitioner’s club, Petitioner charges a flat
guest fee for each visit.

•

Miscellaneous Charges- Petitioner charges a fixed amount for inconvenience and
administrative cost to replace lost membership cards and lost locker keys.
Members are required to surrender their membership cards and any locker keys
upon cancellation of membership.

•

Child Care- Petitioner, for a fee, provides temporary child care to members who
are using the club.

•

Child Care Programs- In addition to the child care described above, for an
additional fee Petitioner offers a variety of classes, clinics, camps, and programs
for children.

•

Spa Services- Petitioner, for a fee, offers a variety of spa treatments, including
massage, facials, manicures, and body treatments performed by professional, nonmedical personnel.

•

Locker Fees- Petitioner, for a fee, allows members the opportunity to rent lockers
where they can store personal items.

Applicable law and regulations
Section 1105(c) of the Tax Law imposes sales tax, in relevant part, on:

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February 14, 2008

The receipts from every sale, except for resale, of the following services:
*

*

*

(4) Storing all tangible personal property not held for sale in the regular course of
business and the rental of safe deposit boxes or similar space.
Section 1105(f) of the Tax Law imposes sales tax, in relevant part, on the following:
(1) Any admission charge where such admission charge is in excess of ten cents
to or for the use of any place of amusement in the state . . . 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. . . .
(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, in part:
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 . . . 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 New York City to impose a local sales
tax at the same uniform rate 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.

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Sales Tax
February 14, 2008

Section 11-2002(h) of the Administrative Code of the City of New York (New York City
Administrative Code) imposes sales tax, in part, on:
Receipts from 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. . . .
Section 527.10(d)(4) of the Sales and Use Tax Regulations provides, in part:
Charges to a patron to or for the use of sporting facilities or activities in which the
patron is to be a participant are excluded from tax.
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:
(2)(ii) Dues do not include any charge for sports privileges or facilities paid by a
member for his guest when such charge if paid directly by the guest would be exempt.
Opinion
Petitioner charges members an initiation fee and monthly fees, for use of its facilities, and
Petitioner also offers special services for additional fees.
Section 11-2002(h) of the New York City Administrative Code imposes a local sales tax
on the receipts from every sale of services by weight control salons, health salons, gymnasiums,
Turkish and sauna baths, and similar establishments and every charge for the use of such
facilities. Petitioner’s fees provide access to a variety of sporting activities and facilities for its
members. Consequently, Petitioner’s facility is not a weight control salon, gymnasium, or other
establishment as described in section 11-2002(h) of the New York City Administrative Code.
See Pontius Realty, supra. Therefore, the fees charged by Petitioner for the services of personal
training, fitness and wellness workshops, sports leagues, private sports lessons, guest fees, child
care, and child care programs as described in this Opinion are not fees subject to the New York
City tax on the use of, and services provided by, a weight control salon, gymnasium, etc.
pursuant to section 11-2002(h) of the New York City Administrative Code. Section 11-2002(h)
of the New York City Administrative Code also imposes local sales tax on the receipts from
beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis, massage and similar
services. Since Petitioner’s services are not similar to the enumerated services subject to tax
pursuant to section 11-2002(h) of the New York City Administrative Code, the fees charged by
Petitioner for such services are not subject to tax pursuant to such section 11-2002(h).

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Sales Tax
February 14, 2008

Not being a social or athletic club (as previously determined in Pontius Realty, supra) the
fees for these additional services are not dues subject to sales tax pursuant to section 1105(f)(2)
of the Tax Law. Such services are also not included within the enumerated services taxed under
section 1105(c) of the Tax Law, and, therefore, are not subject to tax pursuant to that section.
See William A. Barrett, Adv Op Comm T&F, October 9, 2003, TSB-A-03(38)S; Dr. Joan Coff,
Adv Op Comm T&F, May 26, 2005, TSB-A-05(17)S; Dianne C. Hoffman, C.P.A., Adv Op
Comm T&F, December 27, 1993, TSB-A-93(64)S.
To the extent that the guest fees and sports league fees are admissions to or for the use of
a facility for sporting activities, since the members or guests are participants in such activities,
the charges for such admission are excluded from sales tax pursuant to section 1105(f)(1) of the
Tax Law. ( See also section 527.10(d)(4) of the Sales and Use Tax Regulations; and Country
Club Partners, LLC, Adv Op Comm T&F, May 30, 2006, TSB-A-06(15)S).
Miscellaneous charges for lost membership cards and locker keys are separate charges to
cover the cost of replacement of such items and are considered to be an indemnification to
Petitioner for the loss of the membership cards and locker keys. These fees are not for the sale of
tangible personal property by Petitioner to its members and, therefore, are not subject to sales
tax. It should be noted that Petitioner would be required to pay sales tax on its purchases of the
membership cards and locker keys. See Pro Net, Inc., Adv Op Comm T&F, October 2, 1991,
TSB-A-91(65)S.
Locker fees paid by members to rent lockers where they can store personal items are
subject to State and local sales taxes pursuant to section 1105(c)(4) of the Tax Law. See Country
Club Partners, LLC, supra.
Spa services such as massage, facials, manicures, and body treatments performed by
persons who are not medical professionals are not included within the services taxed under
section 1105(c) of the Tax Law, and the receipts from such services are not subject to the
New York State sales tax. However, the receipts from these spa services are 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. It is noted that massage services that are provided
by a physiotherapist, chiropractor, podiatrist, osteopath, or any person authorized to practice
medicine and licensed under Title VIII of the Education Law may be excluded from New York
City sales tax if the services are medical in nature and similar to the services provided by the
categories of professionals enumerated in section 1212-A of the Tax Law and section 11-2002(h)
of the New York City Administrative Code. However, the massage services provided by
Petitioner are not medical in nature and do not qualify for such exclusion, and thus are subject to
the New York City sales tax. See Carapan, Inc., Adv Op Comm T&F, June 21, 1993,
TSB-A-93(40)S; Whitestone Services, Inc., Adv Op Comm T&F, February 28, 1996,
TSB-A-96(12)S.

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Sales Tax
February 14, 2008

It should be noted that other than the application of sales tax to those fees or charges
specifically addressed herein, this Opinion makes no representation as to other fees or charges
that Petitioner may receive from its members.

DATED: February 14, 2008

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Taxpayer Guidance Division

An Advisory Opinion is issued at the request of a person or entity. It is
limited to the facts set forth therein and is binding on the Department only
with respect to the person or entity to whom it is issued and only if the
person or entity fully and accurately describes all relevant facts. An
Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific
time period at issue in the Opinion.