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Ezel / Tax Rulings / TX
TX 8604L0720E08 Sales and/or Use Tax (State,Local,MTA) 1986-04-18

Were health-club membership contracts signed before October 2, 1984 exempt from Texas sales tax?

Short answer: Yes. The Comptroller said contracts entered into before October 2, 1984 qualified for the prior-contract exemption, but that exemption expired September 30, 1987.

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This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Comptroller clarified that a health-club membership contract entered into before October 2, 1984 qualified for an exemption from sales tax.

The letter also put a firm end date on that historical treatment: the exemption for all prior contracts expired September 30, 1987.

Common questions

Did every health-club membership qualify? No. The letter addressed contracts entered into before October 2, 1984.

Was the exemption permanent? No. The Comptroller said it expired September 30, 1987.

Does the letter explain renewals or renegotiated contracts? No. Although the STAR subject mentions renewals and renegotiation, the reproduced ruling body only confirms the treatment of contracts entered into before October 2, 1984.

Citations and references

The reproduced letter does not cite a statute or rule.

Source

Original ruling text

April 18, 1986

Dear ***:

This letter is to clarify our response to your letter of September 5,
1984 concerning the taxability of membership contracts to your health
club.

As stated in ***'s letter of September 17, 1984 a contract
entered into prior to October 2, 1984 will qualify for exemption from
sales tax. The exemption for all prior contracts will expire September
30, 1987, however.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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