NYC To Tax Yoga Studios?
New York yoga studios breathed a
sigh of relief in 2010 when the “Yoga Bill” was passed,
which exempts yoga (including teacher training programs) and martial
arts studios from state educational certification requirements. But
up for another battle, as the state has recently
audited them under the premise that they should be subject to same
kind of tax (4.5%) as fitness studios.
Yoga studios are being threatened to
identify as fitness studios and, as such, pay licensing fees for the
spaces they utilize (up to $30,000), from which dance or movement
spaces are exempt. Lastly, the state is seeking to reclassify yoga
instructors who teach 4-6 hours of classes a week, currently
independent contractors, as employees, a shift that would signify a
slew of clerical and financial obligations (taxes and insurance) for
yoga studio employers.
Studios argue that the proposed tax
would translate into increased cost for students, around $1 per $20
class, and prevent them in the short-term from raising prices to
cover increasing costs. The licensing fees and proposed shift to
treat instructors as employees rather than independent contractors
would be particularly prohibitive for smaller studios, which lack the
celebrity, turnover, and following of cult-yoga studios on the NYC
Is yoga taxable? This is open to
interpretation; in New York state, yoga classes haven’t
specifically been listed among taxable classes and services. Thus the
state’s move to classify yoga as fitness is an attempt to close the
legal loophole which has allowed yoga studios to be exempt from taxes
NYC yoga studios have claimed that they
have more in common with dance and movement studios than fitness
studios and, as such, should be exempt from the taxes and licensing
fees that come with the territory. Of course, the battle
for states to regulate in various ways has been
underway for years. Virginia
successfully exempted teacher training programs from
state regulation, and the debate
has been underway for several years in Texas.
Unclear is the status of marital arts
in this recent move by New York state for taxation and
reclassification. Do martial arts studios currently pay tax and
classify instructors as employees? Traditional yoga has more in
common with martial arts than either dance or fitness, although many
modern yoga studios routinely pull students in the door with promises
of being stronger and more fit. Certainly, the
hot yoga trend has more in common with fitness fad
than traditional yoga or martial arts.
Do you think yoga is more similar to
dance or fitness? What do you think about the taxing of yoga studios and regulation of the yoga industry?