2019 Legislative Session Delivers Gifts to Fitness Industry

Every December, we make a list and check it twice. We want to find out which states were naughty and which were nice to the health club industry.

Overall, state legislatures were less active in 2019 than they have been in recent two-year legislative sessions. This year saw more than 138,000 bills introduced across the 50 states, about 10,000 fewer than were introduced in 2017, the first year of the previous two-year legislative session. A little more than 32,000 of those bills became law, a rate of about 23%, also down from 27% in 2017.

Why the slow-down?

There are many reasons why state lawmakers may have filed fewer bills. One reason could be the issues legislators were wrestling with.

Let's look at the top issues addressed in bills lawmakers filed, considered, and passed in 2019. They are mostly legislation concerning education, health, and economics and finance. Education and health, in particular, are large, complicated issues that are often difficult for legislators to reach agreement on.

Even though 2019 saw less legislative activity overall than previous years, IHRSA still tracked and influenced plenty of bills that could affect health clubs.

Sales Tax on Club Membership Dues

The evidence confirming the many benefits of exercise continues to grow, study after study. Yet, rather than viewing health club memberships as an investment in well-being to be encouraged, many states continue to see the fitness industry as an entertainment expense to be taxed.

Presents: Tennessee Rolled Back Sales Tax on Health Club Membership Dues

Tennessee chose to prioritize its citizens’ health and wellness by repealing the amusement tax—a form of sales tax—on health club memberships and fitness services dues. IHRSA actively advocated for the removal of the “gym tax” since before the start of the 2019 legislative session.

How were we able to convince Tennessee lawmakers to remove the gym tax? Through three critical methods, including:

1. communicating with lawmakers directly about the importance of this issue,
2. submitting testimony in support of removing the tax, and
3. health club operators voicing their support of the tax removal to their elected officials through IHRSA's grassroots campaigns.

IHRSA also successfully beat back proposals to expand the sales tax to club memberships in Montana, West Virginia, and Wyoming.

Coal: New Sales Taxes to Increase Revenue

Even though no states expanded their sales tax to health club memberships in 2019, the idea of using sales tax to increase lost revenues continues to pop up. We are watching Pennsylvania in 2020, as it considers expanding its sales tax to eliminate property taxes.

Restrictions on Automatic Contract Renewal

Some states place unnecessarily restrictive or additional requirements on contracts that renew automatically at the end of their term.

Presents: Three States Spared From New Restrictions

States continue to propose new restrictions on automatic contract renewals. Most of these proposals are general in nature, not specifically targeting the health club industry, but would impact the industry nonetheless.

For example, many contract proposals would require clubs to notify a customer 30 to 60 days prior to their contract renewing. IHRSA was successful in pushing back on proposals to expand restrictions on automatic renewals in Missouri, New Mexico, and West Virginia.

Coal: Restrictions on Automatic Contract Renewal Not Going Away

Some states plan to resume their consideration of automatic renewal restrictions in 2020. IHRSA is particularly concerned and pushing back on potential lumps of coal coming out of New York, Maryland, and Vermont.

Biometrics Restrictions

Wearables, data intelligence, and new technology could be keys to bringing in new members into your club and retaining existing members. Legislators have taken notice of the biometric revolution, too, and are responding with wide-reaching proposals to protect individual privacy.

We understand the need to protect data privacy, but many of these proposals are written hastily without consideration for the data uses consumers are requesting. We are working to protect both your members' privacy and your ability to use technology and innovation that grows your business.

Presents: Defeated Proposed Biometric Bills in Three States

Rash restrictions on technology are not what consumers want and can prevent innovation in the industry. IHRSA was able to combat proposed restrictions on the collection, use, and sharing of biometric information in Florida, Montana, and Oregon.

Coal: Possible Restrictions in 2020

Biometric data was a popular issue for state lawmakers in 2019, and several states will see biometric proposals come up for consideration in 2020. IHRSA is tracking proposals in New York, Illinois, California, and Rhode Island.

All in all, 2019 was a good year for the health club industry. Keep in mind, 44 states are now entering the second year of their two-year legislative sessions. Lawmakers may be back in 2020 with new lumps of coal that your businesses will have to comply with. No worries, IHRSA will be there, too, making sure you also get presents.