Health Clubs and Property Taxes

« Blog | Written by ezfacility | | (0) Comments

There’s been a lot of talk recently about Rodney Steven II, owner of Genesis Health Clubs in Wichita, Kansas. Steven has been fighting local YMCAs that receive tax-exempt status, arguing that the Ys have an unfair advantage over for-profit health clubs that pay property taxes.

Last month, by a 25-14 vote, a bill passed in the Kansas Senate that would exempt for-profit health clubs from paying property taxes. The exemption reportedly applies to health clubs that focus on cardio and strength equipment but not specialty clubs, such as golf courses, spas, and tennis facilities. The bill is now in a House-Senate conference committee, and will presumably be taken up again when the Kansas Legislature resumes its current session on May 8th, after a break.

What people have been debating is, first of all, whether the votes in favor are legit. Some critics have accused Steven of having bought the vote, as his company donated at least $45,000 to Kansas Senate Republicans during their campaigns over the past two years. Twenty of the 24 senators who received contributions from his company voted for the bill, according to reports. (Steven, refuting any connection between his donations and the votes, has pointed out that he’s been politically active for years, that no bill had been written when the donations were made, and that some senators who voted for the bill did not receive any contributions.)

Critics also have argued that the bill would have an impact on local school and municipal budgets that collect property tax money, and that private golf clubs, child-care centers, waste collection companies, and generally any private entity that competes with municipal services might find themselves freed of the obligation to pay property taxes if the bill passes.

But, as Steven told the online fitness business news source Club Industry, “Even municipal golf courses in Kansas are required to collect and pay some taxes. Not every non-profit in Kansas is tax-exempt. Only non-profit and municipal health clubs are 100 percent exempt from collecting and/or paying any taxes. This unique exemption was granted to non-profit health clubs in 1998 by the Kansas Legislature.” And, Steven says, “The Legislature needs to fix their creation of this inequity.”

What do you think? Is the 1998 law unfair? Should for-profit health clubs be required to pay property taxes if nonprofit and municipal clubs are not? Instead, should YMCAs, as one senator suggested, be required to pay property taxes? If the bill passes, will the door be opened for other organizations that compete with municipal services to claim exemption? And might schools and other municipal services be negatively impacted if they are?

What are your own experiences with property taxes?

Leave a Reply

Your email address will not be published.