Does Sales Tax Apply to Memberships?

Do you have to charge or pay sales tax on memberships?
The answer: It depends on the type of membership, and the state you’re in.

As more organizations offer memberships online from gyms and wellness centers to retail warehouse clubs; questions about sales tax on memberships and dues are increasingly common.

This guide breaks down what you need to know.

Are Memberships Taxable?

Some memberships are taxable, some are not.
Sales tax on memberships varies by:

• Type of service or benefit provided
• Whether the membership relates to goods or services
• State-specific laws and definitions

Memberships may be considered taxable if they provide access to taxable goods, services, or benefits, such as retail discounts or recreational use of facilities.

Sales Tax on Gym and Fitness Club Memberships

Health and fitness memberships are one of the most complicated categories when it comes to sales tax. Here's how a few states handle it:

Texas

• Taxable as “amusement services”
• Exempt only if prescribed by a doctor for health maintenance (a new prescription is required for each renewal)

South Carolina

• Exempt if the gym includes:

  • Weightlifting
  • Aerobics
  • Exercise equipment
  • Tracks or swimming pools

• Taxable if it also offers sports like basketball

New York

• Taxable: Memberships to athletic clubs (e.g., tennis, boating, skating)
• Not Taxable: Memberships to health/fitness facilities (e.g., gyms, spas, Pilates studios)

Missouri

• Sales tax depends on what benefits members receive
• Example: Voting rights tied to a club’s initiation fee were not taxable, but access to recreational facilities was taxable

Alaska

• Currently no statewide sales tax, but proposals to implement one may include taxing gym memberships

Industry Advocacy

The International Health, Racquet & Sportsclub Association (IHRSA) actively campaigns against taxing fitness memberships, arguing that it discourages healthy behavior.

They’ve opposed sales tax expansions in Maine, Pennsylvania, Georgia, Arizona, West Virginia, and Wyoming.

Sales Tax on Retail Memberships

Retail and wholesale club memberships can also be subject to sales tax, but it varies greatly by state.

Massachusetts

• Membership fees not taxable if they are solely for entry to discount or warehouse stores

California

• Membership fees are taxable if:
  • The retailer sells only to members and the fee is more than nominal
  • Or if members receive discounted pricing not available to the public

South Carolina

• In a notable case, Books-A-Million was hit with a $242,000+ tax bill for failing to tax $25 “Millionaire’s Club” memberships
• The state ruled that if a membership provides access to discounted taxable goods, then the membership itself is taxable

What Types of Memberships May Be Taxed?

How to Know If Your Membership Is Taxable

Ask these key questions:

• Does your membership grant access to taxable goods or services?
• Are you providing exclusive discounts on taxable products?
• Do different states define your offering differently (fitness vs. athletic club)?
• Are you charging the membership online across state lines?

If the answer to any of these is yes, you may be required to collect and remit sales tax.

Final Takeaway: Membership Sales Tax Is Complex

There’s no one-size-fits-all answer when it comes to sales tax on memberships. Each state has its own definitions, thresholds, and rules, and these can differ based on how your business is structured and what your members receive.

Need Help with Sales Tax on Memberships?

Whether you're running a gym, managing a retail subscription, or offering exclusive member content, sales tax compliance is critical.

TaxConnex serves as your outsourced sales tax department, helping you:

• Determine nexus
• Register with states
• Classify taxable memberships
• File and remit returns
• Stay compliant as laws change

Contact us to learn what it means when sales tax is all on us.