Sponsored by:
Assemblyman AL BARLAS
District 40 (Bergen, Essex and Passaic)
Co-Sponsored by:
Assemblyman DePhillips
SYNOPSIS
Provides gross income tax deduction for certain health club membership fees and personal training services.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax deduction for certain health club expenses, and supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer shall be allowed a deduction from the taxpayer’s gross income for the taxable year in the amount of eligible expenses incurred by the taxpayer in the taxable year, not to exceed:
(1) $5,000 for married individuals filing a joint return or individuals filing as head of household or as a surviving spouse for federal income tax purposes; or
(2) $2,500 for married individuals filing separately, or unmarried individuals, other than individuals filing as head of household or as a surviving spouse for federal income tax purposes.
b. No deduction shall be allowed pursuant to this section for any expenses that are reimbursed or otherwise paid by the employer of the taxpayer.
c. For the purposes of this section:
“Eligible expenses” means the cost of initiation fees and monthly or annual fees or dues for a health club services contract and the cost of personal training services provided at a health club. “Eligible expenses” do not include costs for: ancillary services, other than personal training services, provided at the health club, including, but not limited to, hair, skin, body, or nail treatments, child care services, towel rentals, or locker rentals; guest passes; priority booking for classes; access to premium amenities, including, but not limited to, exclusive lounges; food or beverages; or amounts paid as a fine, penalty, or similar fee for a violation of the terms of the health club services contract.
“Health club” means the same as the term is defined in section 1 of P.L.1987, c.238 (C.56:8-39).
“Health club services contract” means the same as that term is defined in section 1 of P.L.1987, c.238 (C.56:8-39), which contract meets the requirements set forth in section 4 of P.L.1987, c.238 (C.56:8-42).
2. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill allows a taxpayer to claim a deduction against gross income for eligible expenses incurred by the taxpayer for a health club services contract and personal training services if the expenses are not covered by an employer health benefits plan.
Specifically, a taxpayer would be allowed to claim a gross income deduction for eligible expenses incurred by the taxpayer at a health club. The maximum allowable deduction a taxpayer could claim for the taxable year would be: $5,000 for married individuals filing a joint return or individuals filing as head of household or as a surviving spouse for federal income tax purposes; or $2,500 for married individuals filing separately, or unmarried individuals, other than individuals filing as head of household or as a surviving spouse for federal income tax purposes. However, no deduction would be allowed for any expenses that are reimbursed or otherwise paid by the employer of a taxpayer.
Under the bill, “eligible expenses” include the cost of initiation fees and monthly or annual fees or dues for a health club services contract and the cost of personal training services at the health club.
Under the bill, a “health club” means an establishment which devotes or will devote 40 percent or more of its square footage to providing services or facilities for the preservation, maintenance, encouragement or development of physical fitness or physical well-being. Under current law, health clubs are required to be registered with the Division of Consumer Affairs in the Department of Law and Public Safety and operate in accordance with all applicable laws and regulations, which include certain requirements related to the execution, cancellation, and renewal of health club services contracts. A “health club services contract” is an agreement under which the buyer of health club services purchases or becomes obligated to purchase health club services.