Sweating the Small Stuff: New 'Yoga Tax' Approved

Washington D.C., our nation's capital, is the healthiest city in the country, according to a new report from USA Today. But now it's going to cost politicos on the Hill and Gen-Xers in Foggy Bottom a little extra to exercise at the local gym. The D.C. City Council has voted to place services like gym and yoga studio memberships under the umbrella of its 5.75 percent sales tax. The tax hike takes effect on October 1.

Wags are calling the recently approved tax the "yoga tax " or the "wellness tax," but it's hardly a laughing matter to D.C. proprietors who claim that the relatively small bump in their monthly charge could turn off consumers and even prompt them to quit.

Based on a story posted online by CBS News, both entrepreneurs and gyms rats are protesting the increase. In fact, they've gathered in force outside the D.C. Council building during recent meetings to make their voices heard. The Washingtonian reports that several dozen workout enthusiasts even attended one session dressed en masse in neon green T-shirts emblazoned with the slogan "Don't Tax Wellness." Despite their calls to sidestep the issue, and the misgivings of certain city council members, the new tax was still approved.

"To put a tax on fitness, is going to hurt business. But more importantly than that, it's making us a joke," D.C. council member Jack Evans told CBS News.

D.C. already has a reputation as a highly taxed locale, but it is hardly the first, nor probably the last, jurisdiction to broaden its sales tax base. Almost half the states in the country—22 to be exact—already tax health club memberships, with more likely to follow as states are forced to make up revenue shortages.

Don't expect taxpayers in other states to throw in the towel without a fight. A similar protest was touched off in New York back in 2012 when the state strong-armed yoga studios into paying the same taxes owed by "fitness studios," although "dance and movement studios" were exempted from the tax.

It's not just the local workout place that will feel the brunt of the new D.C. sales tax, either. It also applies to fitness classes, tanning salons, car washes, water delivery companies, carpet cleaners, storage lockers, and bowling alleys. They'll all have to chip in with the 5.75 percent tax, starting on October 1. Expect this issue to surface again once the D.C. City Council begins debating its new budget for 2015.

Related article:

New York State Is Attempting to Tax Its Yoga Studios

 

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