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

Plain-English summary

This is a same-day companion opinion to TSB-A-08(10)S (The Sports Club/LA-Upper East Side), issued to a nearly identical Manhattan health club — Reebok Sports Club/NY, with equipment, courts, studios, a pool, a rock-climbing wall, and an outdoor running track. Like its companion, Reebok Sports Club/NY previously won a ruling (2000) establishing it isn't a "social or athletic club" subject to dues tax and isn't a "gymnasium" subject to New York City's local service tax, because members don't control club governance and membership is capped only by facility size.

Applying that same framework to Reebok's specific fee list — initiation fees, monthly dues, personal training, fitness/wellness workshops, sports leagues, private sports lessons, guest fees, lost card/key replacement fees, child care, child care programs, and locker rentals — the Department reached the same fee-by-fee breakdown as the companion opinion:

• Not taxable at all: initiation fees, dues, personal training, workshops, sports leagues, private lessons, guest fees, child care, and child care programs — none fit New York's enumerated taxable-services list, and the club isn't a taxable "gymnasium" or "weight control salon" under NYC's local statute.
• Excluded as participant-sport admissions: guest fees and sports league fees, since members/guests are participants rather than spectators.
• Not taxable — indemnification, not a sale: lost membership card/locker key replacement fees (though the club itself owes sales tax when it buys the cards/keys).
• Taxable — state and local: locker rental fees, taxed as a "storage" service under § 1105(c)(4).

Unlike its companion opinion (which also addressed non-medical spa/massage services taxable under NYC's local tax), this Reebok facility's fee list as described doesn't include spa/massage services, so that issue doesn't arise here.

What this means for you

Health club and gym operators

Even with a favorable "we're not an athletic club/gymnasium" classification on file, review each individual fee line separately — locker rentals remain taxable regardless of your overall club classification, while training, workshops, leagues, and lessons generally stay untaxed.

Multi-location club operators with sister facilities

If you operate multiple locations under a similar business model and one location already has a favorable prior ruling, a fresh Advisory Opinion for each affiliated entity/location (as happened here, alongside the companion Sports Club/LA opinion) reconfirms the same analysis applies — but each location's own facts still need separate review and its own ruling if it wants that certainty.

Accountants advising clubs and studios

Locker fees are the one line item to flag consistently across health-club clients — it's taxable regardless of how favorably the rest of the club's dues/fee structure is classified.

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). This club, like its companion, doesn't meet that test.

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: Does this opinion address spa or massage services?
A: No — unlike its companion opinion for a sister facility, this club's described fee list doesn't include spa/massage services, so the opinion doesn't reach that question.

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 or membership restrictions 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)
• The Reebok Sports Club/NY, Adv Op Comm T&F, Apr. 25, 2000, TSB-A-00(19)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

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_11s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-08(11)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. S070621B

On June 21, 2007, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Reebok Sports Club/NY, Ltd., 172 Tremont Street, Third Floor, Boston,
MA 02111. Reebok Sports Club/NY, Ltd., 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 Reebok Sports Club/NY, is a health club that provides a
variety of fitness and participant sporting activities at its facilities at 160 Columbus Avenue 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 basketball, volleyball and indoor soccer courts, yoga, pilates, boxing, martial arts,
and group-cycling studios, a swimming pool, a rock-climbing wall, an outdoor running track and
a large number of class offerings.
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 and
sports lessons. 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 and management of
the club. The number of members is restricted solely due to of 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 The Reebok Sports Club/NY, Adv Op
Comm T&F, April 25, 2000, TSB-A-00(19)S). Petitioner states that the facts 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:
•

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.

-2TSB-A-08(11)S
Sales Tax
February 14, 2008
•

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, and soccer.

•

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

•

Miscellaneous Charges- Petitioner charges a fixed amount 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.

•

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:
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:

-3TSB-A-08(11)S
Sales Tax
February 14, 2008

(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.
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:

-4TSB-A-08(11)S
Sales Tax
February 14, 2008

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 to 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 The Reebok Sports Club/NY, 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 imposed upon 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).
Not being a social or athletic club (as previously determined in The Reebok Sports
Club/NY, 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-(3)(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

-5TSB-A-08(11)S
Sales Tax
February 14, 2008

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.
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.