New York State Is Attempting to Tax Its Yoga Studios

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. 
 
Related articles:

 

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.