Yoga Tax is Untimely and Debatable
November 3rd, 2008 by Salar
TeachStreet is home to a large community of Washington-based yoga teachers, yoga studios and yoga students that are getting hit by a three year old tax amendment that places yoga studios within the realm of physical fitness services; which need to collect a sales tax from their customers. Over the weekend, our friends at 8 Limbs Yoga Centers in Capitol Hill started issuing a sales tax for their services.
So, why the recent buzz?
Over the last several months the state has been auditing yoga studios, and to the surprise of most studio owners, they are being told they owe over three years in back taxes. Some of the first cases appeared as early as January of this year.
This is an untimely audit push by the Washington State Department of Revenue. Yoga students are expected to pay on average $100 more per year for the same services. This tax is especially hard on the unsuspecting yoga studios that now owe over three years in back taxes. On average, that is about $27,000 in taxes that an audited studio needs to come up with; 30% of their annual revenue! I think the last thing our local economy needs is even less consumption and higher unemployment due to this tax being enforced during a great economic downturn.
Interested parties may want to take a look at this part of the Washington Administrative Code that defines physical fitness services, and clearly exempts yoga as a taxable service under the law:
“(l) “Physical fitness services” include, but are not limited to: All exercise classes, whether aerobic, dance, water, jazzercise, etc., providing running tracks, weight lifting, weight training, use of exercise equipment, such as treadmills, bicycles, stair-masters and rowing machines, and providing personal trainers (i.e., a person who assesses an individual’s workout needs and tailors a physical fitness workout program to meet those individual needs). “Physical fitness services” do not include instructional lessons such as those for self-defense, martial arts, yoga, and stress-management. Nor do these services include instructional lessons for activities such as tennis, golf, swimming, etc. “Instructional lessons” can be distinguished from “exercise classes” in that instruction in the activity is the primary focus in the former and exercise is the primary focus in the latter.”
We want to hear from you. Anyone out there that is affected by this tax. Please leave your comments and concerns.
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