Opening a studio in Washington: presale trust, a $150,000 bond and Pilates tax

October 14, 2026

This is for anyone opening a Pilates, yoga, barre or boutique fitness studio in Washington state. Start with your founding members. Any money a member pays before your doors open goes into a trust account at a federally insured bank in Washington, and you tell the Attorney General within seven days of the first deposit. The alternative is a $150,000 bond. Doing neither is a class C felony.

The Health Studio Services law reaches class studios

RCW 19.142.010 defines a health studio as anyone “engaged in the sale of instruction, training, assistance or use of facilities which purport to assist patrons to improve their physical condition or appearance through physical exercise, body building, weight loss, figure development, the martial arts, or any other similar activity.” A Pilates, barre, cycling or yoga studio sells exactly that. There is no yoga or dance exemption.

The exemptions are schools, licensed professionals, some nonprofits, diet programs, and “a preexisting facility primarily offering aerobic classes, where the initiation fee is less than fifty dollars and no memberships are sold which exceed one year in duration.” The statute defines a preexisting facility as “an existing building used for health studio services covered by the fees collected.” We would not open a new studio counting on that one.

The chapter has no registration, no license and no operating bond. It regulates two things: the contract, and the money you take before you open.

Founding members: a trust account or a $150,000 bond

Section 19.142.060 says: “All moneys paid to a health studio prior to the opening of the facility shall immediately be deposited in a trust account of a federally insured financial institution located in this state.” “Withdrawals from the trust account shall be made no sooner than thirty days after the opening of the entire facility.”

Within seven days of the first deposit, you notify the Attorney General's office in writing of the bank's name, address and location. Each buyer gets a written receipt and the same bank details. If a buyer cancels, or you miss the opening date and the buyer asks, the refund is due within 30 days.

Section 19.142.070 lets you skip the trust account if, before any presale, you post a bond guaranteeing the facility opens. It is “in the amount of one hundred fifty thousand dollars, running to the state of Washington.” Section 19.142.080 makes failing to keep the trust account or furnish the bond a class C felony.

A founding contract carries three more terms. It states the date the facility will be finished. Services must begin within 12 months of signing, unless war, fire, flood or other natural disaster delays the build. And the buyer may cancel “within the first five business days the facility opens for use of the buyer” and you start providing the services. A buyer who cancels that way, or because the facility was not finished by the stated date, gets any initiation fee back in full.

In Frontmat a membership can be sold before opening with billing starting on opening day, so a founding member is charged nothing until the doors open. A founding membership can be capped at a number of spots. Section 19.142.060 reaches money paid before opening, so on our reading a founding member billed from opening day leaves nothing to put in trust. The contract terms attach to the sale, not the money: print the completion date, start within 12 months, and honor the five-day cancel after opening. A deposit, or a pack paid before opening, is money before opening and goes in the trust account, unless you posted the bond. Have a Washington lawyer confirm that reading before you rely on it.

What every member contract must say

• In writing, with a copy and your rules handed over when the buyer signs (19.142.030).
• A written list of every membership plan with its price, given to each prospective buyer. You may not sell a plan that is not on the list. A special offer or discount must be in writing and open to all prospective members, though a group offer need not be (19.142.020).
• No payments spread over more than 36 months and no lifetime terms. Dues “may not be raised more than once in any calendar year” (19.142.040(4) and (5)).
• Clauses telling the buyer they can cancel on death or total disability, on a move of more than 25 miles (for a contract over one year, after its first year), for any reason on 30 days' written notice if the contract runs over one year, if you close for good with no comparable facility of yours within ten miles, and if a facility is not finished by the date in the contract (19.142.040(7)).
• Under a conspicuous caption in capital letters and boldface type, the BUYER'S RIGHT TO CANCEL: written notice before midnight of the third business day after signing, and every amount paid returned within 30 days (19.142.040(9)). A business day is any day except a Sunday or a legal holiday, so Saturday counts (19.142.010).
• Refunds within 30 days of a written cancellation. Unused prepaid dues come back, and a pro rata refund is the contract price divided by the weeks in the term, times the weeks remaining (19.142.050).

A contract that does not comply, or that asks the buyer to waive any of this, “is void and unenforceable as contrary to public policy” (19.142.090). Any violation is a per se violation of the Consumer Protection Act (19.142.100), and a buyer who wins gets reasonable attorneys' fees (19.142.110).

What that means for memberships and packs

The chapter has no exception for a drop-in, so we would treat everything on your price list as a health studio contract. In Frontmat, memberships bill monthly through Stripe on the member's card. There is no annual or multi-month membership, so on our reading the one-year rules do not come up. Class packs can expire after a number of days you set, or never. The chapter does not say how long a pack must stay valid, so ask your lawyer before you set an expiry.

Sales tax: a Pilates studio collects it, a yoga studio does not

Washington treats “Operating an athletic or fitness facility, including all charges for the use of such a facility or for any associated services and amenities” as a retail sale (RCW 82.04.050(3)(m)). An athletic or fitness facility is one “primarily used for: Exercise classes; strength and conditioning programs; personal training services” or activities using equipment such as “stationary cycles, rowing machines, pilates equipment.”

The Department of Revenue says “An entire facility is an AFF if it is primarily (more than 50%) used for AFF activities,” and lists “Pilates facilities” by name. On classes it is blunt: “All instructional lessons provided at an AFF, including swimming lessons, are considered retail sales. There are no exceptions to this provision in the law.”

The carve-out is for facilities that exclusively provide yoga, tai chi or chi gong classes. DOR says their class fees pay business and occupation tax under the Service and Other Activities classification, and “Retail sales tax does not apply.” Yoga taught at a fitness facility is different: there the operator “must collect sales tax.” A yoga studio that adds a sculpt class may move to the taxable side.

The state rate is 6.5 percent (RCW 82.08.020), and the local rate where you open is added on top; DOR publishes the rates by location. A reformer, barre or cycling studio should plan on collecting sales tax on memberships and packs. Barre and mat Pilates are not named in DOR's guidance, but exercise classes are. If your schedule mixes yoga with anything else, ask DOR before you price.

Frontmat does not add a sales tax line to packs or memberships today. A taxable studio in Washington would handle the tax outside Frontmat, for example by building it into the price, and should ask DOR how to show it.

Waivers: adults can sign, parents cannot sign for children

Washington enforces a release of negligence unless it violates public policy, covers gross negligence, or “the clause is so inconspicuous that a reasonable person could find it was signed unwittingly.” That is the test as the Court of Appeals stated it in DeAsis v. YMCA of Yakima (2014), an unpublished opinion upholding a member's release after a fall at the Y. It relied on Shields v. Sta-Fit (1995). There a member was hurt when a trainer he paid extra for told him to take off his support belt during squats. The Court of Appeals enforced his release. “Health clubs do not provide essential services,” it said, so the public policy exception did not apply.

Conspicuousness is where releases lose. The court looks at “whether the provision or its heading or caption set forth in capital letters or in bold type, whether there is a signature line, and whether it is clear that the required signature is related to the exculpatory provision.”

Children are different. In Scott v. Pacific West Mountain Resort (1992), the Washington Supreme Court held that “to the extent a parent's release of a third party's liability for negligence purports to bar a child's own cause of action, it violates public policy and is unenforceable.” The same release did bar the parents' own claims. For a teen class, your insurance carries the weight, not the parent's signature.

In Frontmat the waiver is your own text. Members sign it once, at their first booking, with a typed name. We store the time and a fingerprint of the exact wording they signed, so a later edit never changes what an earlier member agreed to. It is plain text, so emphasis goes in CAPITALS. We never supply waiver language. Get yours from a Washington lawyer.

Workers' comp and texts

Washington's industrial insurance title says “There is a hazard in all employment and it is the purpose of this title to embrace all employments” (RCW 51.12.010). You cannot buy a policy from a private carrier. L&I says: “Washington State does not allow private workers' compensation coverage. You must purchase your coverage from L&I or be a certified self-insured employer.” It also warns that independent contractors may need coverage.

RCW 19.190.060 bars sending a commercial text message to a Washington resident's cell number. The exception a studio can use is that the person “clearly and affirmatively consented in advance to receive these text messages” (19.190.070). Damages are $100 per message or actual damages, whichever is greater (19.190.040), and a violation is also a Consumer Protection Act violation. The chapter covers a text “sent to promote real property, goods, or services for sale or lease” (19.190.010), so on our reading a booking confirmation or waitlist offer is not a commercial text at all. Frontmat sends booking texts only (waitlist offers, confirmations and cancellations) to members who opted in, and stores the time and wording of each opt-in. It sends no marketing texts.

Before you sign anything

1. Decide how founding members pay. Bill from opening day, or open a trust account at a federally insured Washington bank and notify the Attorney General within seven days of the first deposit, or post a $150,000 bond before the first presale.
2. Write your price list: every plan with its price, and every intro offer in writing and open to all.
3. Write the member contract: the six cancel clauses, the BUYER'S RIGHT TO CANCEL in capitals and bold, and the completion date in founding contracts.
4. Work out which side of the sales tax line you are on. If you are a fitness facility, collect 6.5 percent plus the local rate.
5. Open your L&I workers' comp account before your first hire.
6. Have a Washington lawyer write your release with a capitalized heading and a signature tied to it, and insure for minors.

This is our reading of RCW 19.142, the tax statutes, DOR's guidance and the cases as of October 14, 2026. It is not legal advice. Confirm the Health Studio Services questions with the Attorney General's office and the tax questions with the Department of Revenue.

If you are still choosing where to open, we keep the rules in every state on one page.