NASHSVILLE, Tenn. (CLARKSVILLENOW) -Tennessee Governor Bill Lee announced his plans Tuesday to repeal the amusement tax on gym memberships in his upcoming state budget.

“I’m pleased to be able to include a tax cut in my first budget,” Lee said in a statement. “Repealing the gym tax is an important step in reducing the burdens on small businesses in our state.”

The nearly 10 percent amusement tax is placed on memberships to gyms, fitness centers, and health clubs and disproportionately impacts small business owners. On the books since the mid-1980s, the gym tax represents approximately $10 million in state revenue, according to officials.

“Unfortunately, we’ve discouraged Tennesseans from investing in their health and wellness by taxing their efforts,” Lee said. “The skyrocketing costs of health care and Tennessee’s high rates of obesity and diabetes means we simply cannot afford to discourage healthy habits.”

According to the Department of Health, Tennessee ranks 40th in the nation for physical activity and 35th for adult obesity.

Recent estimates show that illnesses related to diabetes, hypertension, and cardiovascular disease cost Tennessee more than $5.3 billion annually in direct and indirect costs.

“I look forward to working with the legislature to modernize our tax code and prioritize the wellness of Tennesseans,” Lee said.

Under Tenn. Code Ann. § 67-6-212(a)(1) and Sales Tax Rule 116, examples of taxable exercise and physical fitness classes offered by fitness facilities include, but are not limited to:
• Aerobic classes (e.g., step or water aerobics,
• Jazz, Latin, world or other dance-based classes)
• Ballet barre workout classes
• Yoga classes
• Fitness boot camps
• Spin/indoor cycling classes
• Indoor rowing classes
• Boxing and kickboxing fitness classes
• High intensity interval training (HIIT)
• Cross training

The law says dues or fees for an exercise or fitness class are taxable regardless of whether the class is an introductory, beginner, regular or advanced level class, and regardless of whether the class is provided on an individual or group basis.

Find more information about the tax online.