Ohio Administrative Code|Rule 5703-9-62 | Physical Fitness Facilities.

                                                
(A) As used in this rule:
(1) "Physical
			 fitness facility service" means all transactions by which a membership is
			 granted, maintained, or renewed, including initiation fees, membership dues,
			 renewal fees, monthly minimum fees, and other similar fees and dues, by a
			 physical fitness facility such as an athletic club, health spa, or gymnasium,
			 which entitles the member to use the facility for physical exercise. Physical
			 fitness facility service includes facilities operated with a principal purpose
			 of fostering or promoting participation in physical exercise. Physical fitness
			 facility service does not include user fees.
(2) "Membership" means the privilege, right, or
			 entitlement to open use or the right to purchase the use of all or part of a
			 facility over an extended period, at least one month, with or without
			 time-of-day or day-of-week restrictions. Open use of the facility does not
			 include the right to only attend instructor-led classes even if the amount of
			 classes are unlimited in the month.
(3) "Dues"
			 means the fee or charge required for membership, affiliation, initiation, use,
			 or subscription.
(4) "Fees"
			 means a charge fixed by a physical fitness facility for certain privileges or
			 services.
(5) "Initiation
			 fee" means a payment as a condition precedent to becoming a member of an
			 organization.
(6) "User fee"
			 is a one-time charge for a limited privilege or service.
(B) The following are instances, not
		  inclusive, in which sales and use tax applies to the sale or use
		  of:
(1) Membership dues or
			 fees whether billed monthly or annually; 
A community center, organized and operated to
			 promote social interaction, fellowship and community involvement, offers
			 meeting rooms; a reading room; a cafeteria; a theater for musical and
			 theatrical productions; and a physical fitness center with a pool, weight
			 machines, exercise classes, and a gymnasium for the use by its members. General
			 membership entitles the member to the use of most rooms and discounted
			 admission to performances. For an additional fee, one can purchase a membership
			 to the physical fitness facility. The general membership is not a membership to
			 a physical fitness facility and is not subject to the tax. The additional
			 membership fee is the sale of physical fitness facility service and is subject
			 to the tax. The entire membership fee is subject to the tax if there is no
			 reasonable separation of charges for the general membership and the fitness
			 membership.
(2) Unlimited membership,
			 classes, lessons, or group sessions for at least one month; 
A physical fitness facility sells a basic
			 membership to all who want to frequent the facility. This fee will get the
			 individual in the door. In addition, if an individual wants to participate in
			 any one particular program, the individual will pay another monthly fee, which
			 grants the open use of the program. All of these fees are considered membership
			 fees to an organization that promotes and fosters physical exercise and subject
			 to the tax.
(3) Initiation fees,
			 including a one-time equity contribution by a member toward a specific physical
			 improvement to a physical fitness facility;
An applicant for membership into a physical
			 fitness facility will pay an initiation deposit. Upon payment, the applicant is
			 given the right to use the facility. The physical fitness facility treats this
			 payment as an interest-free five-year loan that it accounts for as a long-term
			 liability. If a member cancels its membership, the member is entitled to a
			 refund of the initiation deposit over a period of time not to exceed five-years
			 from the date of the member's original acceptance as a member of the
			 facility. These payments classified as loans or equity transactions do not
			 change their nature as fees or dues that are similar to an initiation fee. The
			 amount is taxable.
(4) Renewal dues; and
			 
(5) Monthly minimum
			 fees.
(C) The following are instances, not
		  inclusive, in which sales and use tax do not apply to the sale or use of:
		  
(1) One-time use of a physical fitness
			 facility; 
(a) A physical fitness facility charges
				separate fees for each court usage by the hour. This fee is a user fee and not
				a membership fee; the fee is not taxable.
(b) A physical fitness facility charges a
				separate fee for each trainer-assisted workout. This fee is a user fee and not
				a membership fee; the fee is not taxable.
(c) A self-defense school charges a one-time
				registration fee of one hundred dollars for all applicants to the academy.
				Then, individuals may purchase a variety of ten-week sessions with two classes
				per week. Additionally, the individual may utilize the academys floor
				space and weight bags when classes are not in session. The registration fee
				grants patrons the right to purchase the use of the facility for physical
				exercise and meets the requirements of a membership fee. Tax should be charged
				on the registration fee. The fee for the specified number of classes is a
				"user fee" and not a membership, thus the charge for the classes is
				not subject to the tax. 
(2) Specified number of classes, lessons,
			 or group sessions for a particular activity; and
(a)  A gymnastics school charges a fee for
				twenty-six classes (two per week for thirteen weeks) that are payable in
				advance. This gymnastics school is not selling a membership , but rather a
				specific number of classes.
(b)  A physical fitness facility offers
				exercise classes five days a week, four classes per day. For a monthly fee, an
				individual can participate in any class they choose. This scenario does not
				qualify as a membership fee. This fee does not grant the member the right to
				open usage of the facility for a period of at least one month. Rather, the
				usage fee provides restricted use of the facility only during an organized
				instructor-led class.
(3) A facility that is operated with a
			 primary purpose of making available to its patrons a facility or facilities for
			 participation in social or fraternal activities.
(a)  A fraternal organization, organized and
				operated to foster social interaction and to provide community service, charges
				an initiation fee and an annual membership fee. The social hall of the
				organization has a weight room available for use by the members if they are so
				inclined. There is no additional charge for the incidental use of the weight
				room by a member. This organization is organized and operated for purposes
				other than fostering and promoting physical exercise. The incidental
				availability of fitness facilities for the occasional free use by members does
				not constitute the sale of a physical fitness service. 
(b)  A fraternal organization, organized and
				operated to foster social interaction and to provide community service, charges
				an initiation fee and an annual membership fee. The social hall of the
				organization has a weight room available for use by the members if they are so
				inclined. The fraternal club charges a fee for each use of the weight room
				facility. A pay-for-play fee or user fee is not a membership. It is a fee for
				the one-time use of the facility. User fees are not to be the sale of physical
				fitness facility service and are not subject to the tax.
(4) Any program that is not fundamentally
			 for the purpose of fostering or promoting participation in physical exercise
			 but may be offered at the same facility as a physical fitness facility service
			 is not considered a physical fitness facility service, as long as, that program
			 is billed separately by the physical fitness facility. Some examples of
			 include, but are not limited to, lifeguard training, child care (including
			 afterschool or early learning), adult literacy programs, English language
			 learning, G.E.D. classes, substance abuse programs, Alzheimers
			 management, obesity intervention, first aid, injury rehabilitation, or college
			 preparation classes.
(D) Unless an exemption based on who
		  purchases the product or who sells the product applies, a physical fitness
		  facility is unable to claim an exemption on purchases of equipment or supplies
		  used or consumed at the facility to provide the service.