ASSEMBLY PASSES REPEAL OF SALES TAX
ON NON-PROFIT HEALTH CLUB FEES, DUES
Measure Also Would Rescind Seven-Percent Levy on Municipal Parking Fees

(TRENTON) - The General Assembly today passed legislation Assemblymen Jeff Van Drew, Lou Manzo, Reed Gusciora, and Patrick Diegnan, Nelson Albano and Assemblywoman Linda Stender sponsored to exempt from the state sales and use tax all not-for-profit health and fitness club dues and local parking fees.

"When attempts are made to more reasonably and evenly apply the state sales tax, care must be taken to not adversely or unfairly impact residents in their everyday lives," said Van Drew (D-Cape May/Atlantic/Cumberland).  "Elimination of the sales tax on non-profit health club dues and public parking fees is consistent with our overriding efforts to promote physical fitness and enhance our state's affordability."

The measure (S-2269/2289/A-4065) would exempt the initiation fees, membership fees, and dues charged by non-profit health and fitness, athletic, and sporting clubs - such as the YMCA - or non-profit shopping clubs from the state's seven percent sales tax.

"It is vitally important that non-profit organizations and hospitals that offer access to athletic facilities are not impacted by the sales tax," said Manzo (D-Hudson).  "The nonprofit community offers these amenities as a community service, not as a means of profit, and  must have every means at their disposal to encourage healthier lifestyles."

 "Slapping the sales tax onto a gym membership is not a means of enticing someone who wants to take the first step to improve their health," said Gusciora (D-Mercer). "The ability to offer tax-free fitness memberships will allow us to further promote the ideal of a healthier New Jersey."

"Requiring non-profit organizations to assess the sales tax on access to their health facilities completely contradicts their core mission of community involvement and personal improvement," said Stender (D-Union).  "Today we correct that disparity."

The measure would clarify the Legislature's intent to exempt all public motor vehicle parking and garage fees from the sales tax. The language was deemed necessary after it was found that rules promulgated by the state Division of Taxation exempting "metered municipal parking" did not cover certain long-term public parking.

The bill would clarify the tax-free provision for all public parking fees, regardless of whether the parking is offered directly by a municipality, or municipal or county parking authority.

"The most important step government can take is to ensure that tax laws are being enforced fairly," said Diegnan (D-Middlesex).  "We must remove a legal inconsistency that is especially unfair to commuters."

"Applying the sales tax to public parking runs counter to the Legislature's desire to help towns and cities draw new patrons into locally based small businesses," said Albano (D-Cumberland).

The sales tax exemptions would be retroactive to October 1, 2006, and the measure would create a system for consumers to receive a refund.

The bill also is sponsored by Assemblymen Frank Blee (R-Atlantic) and James Holzapfel (R-Ocean).

The legislation passed 78-0 with two abstentions in the Assembly.  The measure returned to the Senate, where a concurrence vote was scheduled so the bill could go to the Governor's desk today for his signature, veto, or conditional veto.

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