RYAN LAW FIRM, LLP WINS SALES AND USE TAX CASE FOR GOLD’S GYM
December 3, 2018
GOLD’S TEXAS HOLDINGS GROUP, INC. V. HEGAR
The Travis County District Court has recently ruled that Gold’s Texas Holdings Group, Inc. (“Gold’s”), represented by Doug Sigel and Rich Moore, was eligible for a refund of sales and use tax paid on all consumables and movable items purchased for member use.
Gold’s owns and operates fitness centers throughout the State of Texas.
The Texas Tax Code exempts the purchase of tangible personal property from sales and use tax when the tangible personal property is acquired for the purpose of transferring it as an integral part of a taxable service. At issue in the case was Gold’s purchase of consumables (shampoo, bodywash, paper towels, etc.) and movable items (dumbbells, kickboxing equipment, exercise balls, etc.).
Gold’s purchased these consumables and movable items for placement in its fitness centers and use by Gold’s members.
Relying on the district court decision in Fitness International, the Honorable Karin Crump found in favor of Gold’s, holding that the Gold’s purchased the consumables and movable items for the purpose of transferring them to Gold’s members as an integral part of the membership. The court found the fact that (1) Gold’s members could use and consume the items at their leisure without restriction, (2) Gold’s members were not limited in duration or location on the use of equipment, and (3) Gold’s employees could not use the equipment established that the consumables and movable items were transferred to Gold’s members and therefore, exempt from sales and use tax under the Texas Tax Code.
For more information, contact:
Practice Group Leader, Sales and Income Tax