HEC: An exercise in taxation

Kevin Boatz
Print/Online reporter

For the first time, students of Pierce College who purchase a gym membership will pay $16.41 as opposed to the previous amount of $15. As of winter quarter 2015, a 9.4 percent sales tax has been added to the charge of all gym memberships.

The addition of this tax comes as a result of an audit from the State Department of Revenue. Pierce College had always assumed that its fee for use of physical facilities would be tax exempt because of its uses in the educational process.

According to the DOR, however, the Health Education Center is more accurately considered a physical fitness service and despite Pierce College being an educational institution, it must still pay fees for enterprise activities that would normally be subject to tax.

“Even with the tax increase, the membership is still a reasonable price,” Pierce student Cristian Rivera said.

The law being used to enforce the tax was created in 1993 and pertained to the 9.4 percent taxation of establishments that offer “physical services,” a term that can encompass anything from providing workout equipment to dance classes and even billiards tables.

Tax becomes a larger issue when considering the price of a gym memberships for staff or students who don’t pay the construction fee based on a 15 credit schedule. A construction fee is included in tuition that pays for part of the membership. The price of a membership for staff is $20 while non-construction fee students must pay $60 per quarter.

Non-Pierce College state employees have the highest rate of all, $90 per quarter. A 9.4 percent tax can increase the price of these memberships to $8.46.

Despite the addition of a sales tax, HEC manager Brian Kovacevich, believes that it will not affect gym membership sales.

“(The HEC membership) is still a reasonable price and cheaper than any other gym that you could attend monthly,” Rivera said.

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HEC: An exercise in taxation

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