February 10, 2014

SB72 the bill that eliminates property tax on owner/operated clubs had a hearing before the House Taxation Committee on Feb 3. Presentations were made by Club 1 Fitness of Great Bend, Maximus Health Clubs of Topeka, Genesis Health Clubs, and KHFA. Written testimony was provided by HealthRidge Fitness of Olathe and LifeTime Fitness. These presentations centered on the unfair competition between non-profits and/or government run Health Clubs and for-profit Health Clubs.

Many communities in Kansas have tax funded Recreation Centers that have large fitness components. For-profit clubs in these communities must compete directly against these tax-exempt facilities and also pay taxes to build and operate them. This drastic unfairness was highlighted in the testimonies from Club 1 Fitness, HealthRidge and LifeTime. The Committee Members seemed very concerned about this unfairness.

Testimony from Maximus and Genesis was centered on the non-profits in their communities. Non-profit health clubs, especially the YMCA, have been building their facilities in some of the wealthiest zip codes in these communities. While the YMCA does provide some charitable services; it was pointed out that most of these services are funded with government grants or tax-exempt donations. Again, the Committee Members seemed to understand the unfair competition that exists in these communities.

The next step is a vote in the House Tax Committee and then a vote on the House Floor. Please check back to see the continuing progress of SB72.

Click here to read the January 2013 "Economic Results of Tax Reductions for Health Clubs in Kansas"