Tax Confusion Knots Up Yoga Studios
Sunday, July 15, 2012
There’s a new yoga pose in New York City: limbo.
Yoga studios in New York City are confused over whether they fall under a state law that applies sales tax to gym memberships.
Last April, tax officials in Albany announced that yoga studios would have to pay a 4.5 percent tax, just as gyms do.
But many studios weren't apprised of the new sales tax, so now it's on hold until state tax officials come to an agreement on when and how to implement the tax, explained Alison West, director of Yoga for New York, a group that represents studios across the city.
"The government posted a bulletin saying that yoga classes should be taxed because they're like weight loss salons and gyms," West said.
Theoretically, the tax would be passed on to customers, adding 4.5 percent to the cost of classes, or even more if studios decide to increase their prices a full dollar amount, which would include taxes.
But before studios can decide on how to implement the tax, the state Department of Taxation and Finance has to issue its guidance, said Geoff Gloak, spokesman for the tax office.
"Right now, everyone's in a holding pattern waiting for the guidance to be issued and we're going to issue that shortly," Gloak said.
In the meantime, studios are unsure how to proceed.
In May, YogaWorks emailed clients that it would begin charging tax starting on June 1, but the studio has since put those plans on hold until a final decision is reached.
Yo Yoga on the Upper East Side announced in a letter to its patrons that it's raising its prices overall, combining the additional tax with a higher cost of doing business.
"I think it's an awful idea. Why tax yoga?" said Karen Cantrell, a 55-year-old patron of YogaWorks in Soho.