Local YMCAs may benefit from legislation
Tax-exempt orgs may not have to pay new 'Health Club Tax'
BY JAY BODAS
Staff Writer

A recent 7 percent "health club tax" imposed on membership fees on all health and fitness clubs in the state would be enough to make you sweat.

But with the new tax less than seven weeks old, legislation is now under consideration in the state Legislature to exclude tax-exempt organizations such as the YMCA from being subject to the tax.

The so-called health club tax, which went into effect statewide on Oct. 1, imposes a 7 percent sales tax on membership and associated fees for all health, fitness, sporting and shopping clubs and organizations in the state, unless the organization's members are predominantly under the age of 18.

YMCA CEO William Lovett is not pleased.

"We are incensed at the [New Jersey] Treasury Department at this point," Lovett said. "What is obscene to me is that we have been directed by Woodbridge to charge sales tax on memberships at the Woodbridge Community Center."

Newly sworn-in Woodbridge Mayor John McCormac explained the township's position on the issue.

"We need to collect the tax, but if it turns out that it was wrong, we will refund it to the taxpayers," McCormac said. "The worst that could happen is that we don't collect it, and a year later the state bills us, because then the township would have to pay it."

Unlike the Edison and Metuchen YMCA branches, the YMCA operates the Woodbridge Community Center as a municipal community center, and municipalities are included in the new regulations, Lovett said.

Other entities now affected by the tax include JCCs (Jewish Community Centers) and outdoor community pools run by municipalities.

"Metuchen and Edison are YMCA-owned and operated branches, and so we are not charging sales tax there," Lovett said. "Of course, in both of those centers, the majority of the members are under the age of 18, but we think this is not an appropriate reason to determine who pays sales tax."

The new legislation, which is currently being discussed in the committee, was proposed by Assemblywoman Linda Stender and Sens. Barbara Buono and Joseph Vitale.

"Forcing them to collect the sales tax on services they provide will create a hardship not only for the YMCA, but also for the thousands of seniors and families that rely on their programs every day," Buono said.