New York State Is Attempting to Tax Its Yoga Studios
by AccountingWEB on
By Terri Eyden
Last year, after the Bureau of Proprietary School Supervision (part of the New York Education Department) attempted to subject yoga studios to licensing regulations, the proposed "Yoga Bill" was signed into law by Governor Paterson on March 24, 2010. The bill exempts yoga and martial arts studios from state educational certification.
Now, New York wants to tax yoga studios by:
- Auditing them under the claim they should be subject to the same 4.5 percent tax and the same regulations as fitness studios (versus dance or movement studios).
- Forcing yoga studios to treat instructors as employees rather than independent contractors.
- Labeling yoga studios as fitness studios, which are required to pay licensing fees.
Yoga for NY, a nonprofit that lobbied to get the original Yoga Bill passed last year, is attempting to prevent these tax measures from passing based on the following issues:
- Yoga classes are not specifically listed among the services and classes that are taxable; therefore, the matter is open to interpretation.
- The proposed 4.5 percent tax would equate to studios needing to increase their class fees by about $1 for a every $20 class, a cost that would then be passed on to students.
- Only the largest studios could survive if burdened with the thousands of dollars it would cost if independent contractors were to become employees.
The bottom line: Yoga classes in New York could become much more expensive for both studio owners and students.