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Sales Tax Issues Plague NY Yoga Studios – What Is Yoga to the Government?

in Business of Yoga, YD News

Some of you may be aware of Yoga for NY and the battle they fought two years ago (and won) against NY State over licensing fees. They organized to rally against government regulation but have stayed united as an organization ever since. A few weeks ago, YFNY came together again to discuss recent legal challenges, predominantly, the sales tax issue, that isn’t only affecting NY but other states and studios across the country.

Perhaps the biggest question here, and in other cases before or after, is how does government define yoga? And if forced, or even given the liberty, to declare ourselves, how would we define it?

Below are the meeting notes. Originally posted at YogaCityNYC.

State And City Cracking Down

On Monday [2/27/12], yogis, studio owners, teachers and lawyers met up at Yoga Union to discuss the recent slew of legal challenges that the yoga community finds itself up against.

Studios from Manhattan, Queens, Brooklyn and Westchester were represented among the meeting’s 60+ attendees which was organized by Yoga For New York, which led the charge in stopping Albany’s the last attempt to license yoga teacher training programs for a very hefty fee back in 2009.

As many of these attendees are currently facing legal action, YogaCity NYC will not be naming particular studios or participants by name in this article because that could potentially cause them more trouble.

As YogaCity NYC reported last week, there have been a recent spate of audits on studios for failing to charge sales taxes on their yoga classes.  This issue was on the agenda, along with concerns about additional audits on studios for the Independent Contractor status of their teachers and Certificates of Occupancy for their space.

Alison West, Executive Director of Yoga For New York, began the meeting with the Independent Contractor issue.  One studio owner got up and told about how she had been under audit for 6 years after a teacher filed for unemployment insurance and the Department of Labor launched an investigation.

When asked for a show of hands to see how many other studios had faced similar audits, at least half a dozen hands went up around the room.  As the conversation developed, it became clear that the financial and clerical burden of these audits places a large financial and time burden on many small studios.

Additionally, if teachers are hired as employees, it would further raise the burden and perhaps result in workman’s compensation costs being doubled or tripled for these teachers as many work at multiple studios.

Next on the agenda: sales tax audits.  At least three studios were present who had or were in the process of being audited.  One of the main themes of both the Independent Contractor and sales tax discussions was the range of government agencies that are involved in all of these legal situations and the confusion that causes.

The sales tax audits, for example, seem to be originating from the State level, even though they are seeking to enforce and collect a New York City tax.  There remains much confusion about whether all yoga classes are to be taxed, or some are exempted, or whether yoga studios are even part of the new legislation.  One studio owner was told, by a state representative, that all sales tax audits were now on hold for a week.

Finally, issues of occupancy and building permits finished out the agenda.  The range of issues here is wide and involves, again, many different agencies and disparate interpretations of categories in the law.  One kid’s studio has been closed down because the city-approved renovations of their walls were deemed unfit once the Department of Buildings decided they were a day care facility.

The major theme in all these issues is how, legally, yoga studios and what people do there are classified.

As these legal challenges continue to be shrouded in confusion and studios scramble to figure out what to do, subcommittees on all three issues have been formed by Yoga for New York to gather information and offer help.

Help is Needed for this effort!! If you would like more information  or have an experience you’d like to share, please email yogaforny@yogaforny.org. The Yoga for New York website is currently being updated to reflect these new challenges.  The next Yoga For New York meeting will be held on March 26 at 1:30 at Yoga Union, 37 West 28th Street, 4th Floor.

–Alex Phelan

Yoga for New York facebook page.

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1 comment… add one

  • Paul Krugman Yogi

    But regulation and government are good! Rainbows, unicorns, and Skittles appear when the government gets involved! The government doesn’t consist of individuals exercising power, seeking to benefit their career and looking to get other people’s money based on legal compulsion! What we need is more regulation! We should tax the 1% yoga studios even more for exploiting everyone! Everything will get better if we do!

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