A provision in LB169 will require Nebraska fitness businesses to collect sales tax on memberships and services—and most owners don't know it yet.
Most Nebraska gym and fitness studio owners have no idea that a tax change buried in state legislation will affect how they collect revenue and file taxes in less than a year. LB169, titled "Eliminate certain sales and use tax exemptions and impose sales and use tax on certain services," contains a provision that will impose sales tax on a broad range of personal and professional services—including fitness instruction and gym memberships—effective October 1, 2025.
Under Section 2 of LB169 (amending Nebraska Revised Statute 77-2701.16, found on pages 8-9 of the bill), the state legislature expanded the definition of "gross receipts for providing a service" by adding subdivisions (i) through (z). This expansion subjects fitness services—previously untaxed in many cases—to Nebraska's sales and use tax.
For gym owners and fitness studio operators, this means that starting October 1, 2025, you will be required to:
This is not optional. The provision applies to all fitness businesses in Nebraska, regardless of size.
If you own or operate a gym, CrossFit box, yoga studio, personal training business, Pilates studio, or any other fitness instruction or membership-based facility in Nebraska, this law applies to you. The broad language of subdivisions (i) through (z) captures fitness services under the expanded definition of taxable services.
The October 1, 2025 effective date (per Section 4, Page 11 of LB169) gives you time to prepare, but preparation should begin soon. You will need to:
If you use membership management software or point-of-sale systems, contact your vendors now to confirm they can support sales tax collection by October 1, 2025. Some systems may require updates or configuration changes.
LB169's expansion of taxable services is a significant operational and financial change for Nebraska fitness businesses. The provision is not widely known in the industry, which means many owners are unprepared. The sooner you understand the details and begin planning, the smoother your transition will be when the law takes effect.
For detailed guidance specific to your fitness business model, consult with a Nebraska tax professional or your state trade association. The Nebraska Department of Revenue will provide official guidance as the October 1, 2025 date approaches.