Taking Taxes to the Mat
Life + Money

Taking Taxes to the Mat

D.C. Council wants to tax yoga classes.  What’s next?

NBCWashington.com

For much of this year, states and cities have worked to balance their budgets by imposing “sin” taxes on items and activities some folks deem unhealthy or even immoral. But now, even “good for you” activities are targets of the tax man. 

To help close the city’s $550 million budget gap — an effort which a few liberal groups have been lobbying for in recent weeks — the Washington, D.C., city council is toying with a 6 to 8 percent sales tax on yoga classes and gym memberships. Though the council won’t vote on the fiscal 2011 budget until June, members began hearing a proposal today.

“You pay tax on your yoga mat, your leggings, your water bottle — even on a yoga DVD. Why do you not pay a tax on a yoga class?” says Katie Kerstetter, a policy analyst with the left-leaning DC Fiscal Policy Institute (DCFPI). DCFPI and the Fair Budget Coalition, which is made up of three dozen nonprofit and advocacy organizations, champion the concept of moving from taxing products to taxing consumption. Together, the groups’ joint proposal, which is being discussed in city hall, would also extend the sales tax to services including pet grooming, taxidermy and dating services.

D.C. yoga studio owners like Ian Mishalove of Flow Yoga Center sympathize with the local government’s economic woes. But they don’t understand why anyone would want to deter people from participating in fitness activities like yoga, which promote wellness.

“If they want to tax me to go to the theater, or tax my son’s diaper service, I can live with that and understand that,” says Mishalove. “But when they stray into the realm of taxing services that promote health and wellness, I think that is such a mistake when there are so many illnesses in our society that yoga and exercise helps.”

It didn’t take long for dedicated yogis to rally and protest the tax. After Flow Yoga Center posted a petition on its website yesterday morning, about 2,000 people signed and submitted it to the D.C. city council, Mishalove says. And a Facebook group urged people to practice yoga in Freedom Plaza this morning during rush hour before the city council met at 10 a.m. The spirited group of about 20 hoisted signs reading, “No Taxation on my Sun-Salutation" and "Money Doesn't Grow on Tree Pose," in between yoga poses. 

Proponents of the tax argue that people who practice yoga and belong to gyms are affluent enough to pay the added tax — a notion that Mishalove finds untrue based on his clientele. While he says he has not taken an inventory of all the yoga students, his studio attracts a lot of middle-income people, including students and nonprofit employees who rely on reasonable prices.

“People aren’t driving fancy cars and wearing flashy clothes,” he said.

Still, the average yogi is wealthier than the average American. A 2008 Yoga Journal study found that about 44 percent of yogis have incomes of more than $75,000 a year. Currently, the only other state or city in the U.S. that taxes yoga is Missouri, which approved a 4 percent sales tax in November 2009. 

Fair or not, many think the proposal is lame and shortsighted. “I honestly think it’s a ploy out of desperation, taxing yoga studios,” said Kim Weeks, owner of Boundless Yoga in DC’s U Street neighborhood.  “DC is totally broke and this is what it’s come to.”
 

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