This is huge news for NY yoga studios. Once again Yoga for NY has triumphed over the NY government. The meetings, fundraisers and petitions seem to have paid off as guidance was handed down Wednesday stating that yoga studios will NOT have to collect sales tax on classes.
The issue, in short, was that last year the New York Department of Taxation and Finance ruled to include yoga studios in the category of fitness rather than movement (dance studios aren’t taxed) and went ahead issuing tax or be damned notices. Yoga for NY, the same organization who won the licensing battle in 2009, stepped up and, well, organized.
The official guidance came today via the NY State government website stating that yoga studios that are strictly for yoga will not need to collect sales tax:
For Release: Immediate, Tuesday, July 24, 2012
Contact: Geoffrey Gloak, 518-457-4242
The New York State Department of Taxation and Finance has issued guidance regarding the sales tax treatment of yoga facilities in New York City.
The guidance notes that charges for yoga classes by facilities in New York City that offer only instruction in various yoga disciplines are not subject to the New York City local sales tax.
Charges for yoga instruction by a facility that otherwise qualifies as a weight control salon, health salon, or gymnasium (for example, a facility that also offers its customers access to exercise equipment, Pilates or aerobics classes) are subject to the New York City local sales tax.
For more information:
So there you go studio owners and students worried about rising prices, you can breathe a deep sigh of relief! But there were some studios preemptively collecting tax when the threat of audits broke earlier this year, which means some students have already been paying tax as a just in case measure. Woops. Something tells us we might have to chalk that one up to an unceremonious puja.
As for Yoga for NY, their work is not over yet, executive Director Alison West shares in their newsletter. Regarding the whole contractor vs. employee issue:
Now that this has been achieved, we can redouble our efforts on the Department of Labor front, where I am also happy to say that our meeting is leading to serious consideration of the issues we brought before the DOL in Albany two weeks ago.
No savasana for the weary.
- New York Yoga Studios Fight Back Against Sales Tax, Audits, Raising Prices
- The Heart of Teaching Yoga (…and discovering the secret to the meaning of ‘advanced’)
- Athleta Creeping on Lululemon to Close Gap on Yoga Market
- What Is Your Yogi Name? Read This Chart and Find Out
- Stephen Colbert Interviews Vikram Gandhi On His Fake Yoga Guru ‘Kumaré’
Really informative. This one can be very useful.
Great news, honestly.
Why are yoga studios exempt from taxation? The silly little whiny yogis call it a ‘donation’ , when in fact the studios charge between 12 and 25 bucks to walk through the door. This is a bad decision in my opinion. “PAY YOUR BILLS PEOPLE. HOW CAN YOU MEDITATE IF YOU DON”T PAY YOUR BILLS?”~ Sri Dharma Mittra
Read the actual announcement, Tax Man. Throughout the city there are dozens, if not hundreds of services that are not required to collect this local sales tax. Studios as businesses continue to pay all the other appropriate taxes including payroll and income tax. The sales tax law as written was unclear, and several studios presented an (obviously compelling) case to the powers that be that yoga studios offer services sufficiently similar to other entities not required to pay this tax. It’s not like studios have been dodging this tax; the state itself only considered collecting this tax last year. Now they’ve reconsidered. If you’d like to pay an extra 4 percent to the city for every yoga class you take, I am sure the government would gladly accept your “donation.” or you can just stop whining.
aerobic, Pilates or other exercise classes;
child care services;
fitness and wellness workshops;
personal training services;
use of a spa and services provided by persons who are not medical professionals (such as massage, facials, and body treatments); and
They forgot to add:
Ayurveda consultations…aka weight loss
YTT…aka personal training
Private yoga teaching aka personal training.
The list goes on and on.
Yoga studios are dodging a fair tax through semantics. Satya is DOA in the current state of “Yoga INC”
Totally great news and great post. http://extendyoga.com