Washington Sales Tax on Fees collected from a personal training business subject to tax
The Administrative Review and Hearings Division (ARHD) determined that charges by the taxpayer, an operator of a gym, to a personal training business for the use of the gym to host fitness classes are properly subject to retail sales tax. Although the taxpayer contended that its relationship with the personal training business is a “partnership” and the fees it collected are not for use of the facility but a “partnership fee,” the ARHD noted that the contract between the parties specifically states that they did not intend to establish a partnership. Because fees charged to personal trainers by gym operators for using the operator’s facilities are subject to retail sales tax under Wash. Rev. Code §82.04.050(3)(g)(i), the ARHD concluded that the taxpayer is liable for retail sales tax on the fees charged. (Washington Tax Determination No. 20-0297, 11/04/2020, 41 WTD 222, released 05/16/2022.)
Washington Sales Tax on Fees collected from a personal training business subject to tax
