Washington, DC—July 3, 2025—The Health & Fitness Association (HFA) today commended Congress on the passage of the One Big Beautiful Bill Act, a comprehensive tax package delivering long-term certainty, tax relief, and growth opportunities for fitness businesses and entrepreneurs.
HFA joined a broad coalition of business advocates in support of key provisions—including the expansion of the Qualified Business Income (QBI) deduction, enhancements for S corporations, and Main Street tax measures—that directly benefit fitness operators, studios, franchisees, and industry professionals.
“This legislation provides the financial and operational certainty fitness businesses need to grow,” said Liz Clark, HFA president and CEO. “By enhancing and locking in pro-growth tax provisions, Congress has given fitness operators the ability to plan ahead, reinvest with confidence, and continue driving health and economic impact in communities nationwide.”
The legislation strengthens Section 199A, the Qualified Business Income (QBI) deduction, by making it permanent and increasing the deduction from 20% to 23%. Originally enacted in 2017, the QBI deduction was set to expire in 2026. Without congressional action, millions of pass-through businesses—including many gyms, studios, and franchise operators—would have faced a sudden and significant tax increase.
By locking in and expanding this deduction, the bill delivers long-term tax relief for fitness businesses structured as S corporations, LLCs, and sole proprietorships. The result is lower effective tax rates, improved cash flow, and greater capacity to reinvest in staff, facilities, and long-term growth.
In addition to improvements to the QBI deduction, the bill includes provisions that directly support the structure and workforce of the fitness industry. It enhances tax treatment for S corporations, a dominant structure among gyms and fitness franchisees, helping them remain competitive with larger companies. It also eliminates federal income tax on tips and overtime pay—an especially valuable benefit for personal trainers, group fitness instructors, and support staff whose earnings often depend on variable compensation.
The bill also expands the standard deduction and child tax credit, giving American families more disposable income to invest in health, wellness, and recreation, further supporting growth and participation in the fitness sector.
While we are disappointed that the provision to allow physical activity expenses under HSAs was removed prior to final passage, we appreciate lawmakers’ focus on providing long-term tax certainty for small businesses and look forward to working with them on future policies that make fitness options more affordable and accessible for all Americans.
HFA commends President Trump, Congressional leaders, and its coalition partners for advancing these business-friendly provisions. The association will continue to advocate for smart, fitness-supportive policy and work to ensure the effective implementation of this landmark tax legislation.
