S.F. 129 Section 1. Section 423.3, Code 2013, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 99. The sales price of a physical exercise 3 club contract. For purposes of this subsection, “physical 4 exercise club contract” means the same as defined in section 5 552.1, and “sales price” includes “contract price” as defined 6 in section 552.1. 7 EXPLANATION 8 This bill creates a sales tax exemption for physical 9 exercise club contracts. The term “physical exercise club 10 contract” is defined in Code section 552.1 and means an 11 agreement by which a buyer is entitled to membership in a 12 physical exercise club or use of the services or facilities 13 of a physical exercise club. The exemption applies to the 14 “sales price” of such contracts, which is defined in Code 15 section 423.1. However, because Code section 552.1 uses the 16 term “contract price” in relation to physical exercise club 17 contracts, the term “sales price” is defined for purposes of 18 the exemption to include “contract price”. 19 By operation of Code section 423.6, an item exempt from the 20 imposition of the sales tax is also exempt from the use tax 21 imposed in Code section 423.5. 22 -1- LSB 1805XS (1) 85 mm/sc 1/ 1