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NJ Considers Sales Tax Refund Bill

TRENTON, NJ -- The New Jersey General Assembly is considering a bill that would exempt fitness clubs from a 7 percent sales tax and would give club members a refund for sales tax they’ve paid on memberships.

The Assembly Appropriations Committee released legislation on March 6. Patrick Diegnan was one of four Assemblymen who sponsored the legislation.

“The state should be encouraging individuals to use health clubs,” Diegnan told the Courier News. “It simply doesn’t make sense to increase the ultimate cost of club dues by imposing the sales tax on fees.”

New Jersey legislators admitted the state targeted the wrong service when it brought fitness clubs under the sales tax in October as a way to close New Jersey’s $4.5 billion budget gap, according to The Express-News. However, legislators have yet to solve how they will make up the $75 million a year the tax was expected to raise.

The original version of the bill would have applied only to nonprofits. That raised an uproar from the Robert Wood Johnson (RWJ) Health and Wellness Center in Hamilton, NJ, which started a letter-writing campaign last year to fight the proposal.

Last November, the New Jersey YMCA Alliance, which represents 44 YMCA branches, filed a lawsuit seeking an injunction prohibiting the sales tax on YMCA membership fees. Also last year, Assemblyman Bill Baroni, who lost 130 pounds from a regular exercise regimen at the RWJ, introduced legislation to abolish the tax. Baroni had the support of the American Heart Association.

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