NEW YORK TAXES YOGA

Updated: Monday, 02 Apr 2012, 4:25 PM EDT
Published : Monday, 02 Apr 2012, 4:25 PM EDT

By THE WALL STREET JOURNAL

WSJ.COM | NEWSCORE - The New York Department of Taxation and Finance decided that yoga studios fall into a category of businesses -- specifically weight control or health salons -- that must pay the city's levy, officials said.

The decision was revealed last April in a bulletin from the department and now is sinking in as yoga studios across the city prepare their taxes.

The state -- which collects the city's sales tax -- already began auditing yoga studios, presenting them in some cases with bills for back sales taxes for the past three years.

"We do see this as a fairness issue," according to Edward Walsh, a spokesman for the Department of Taxation and Finance, noting that Pilates studios have to pay sales tax. "Businesses that provide similar services should be subject to the same taxes in the city."

The new tax policy was met with cries of protest from the yoga business community. For years, studios budgeted without the expectation of a sales-tax hit.

"Yoga classes have been around forever and not taxed," according to Alison West, executive director of Yoga for New York, a lobbying group.

She said the new tax policy could not have come at a worse time, with the industry just beginning to get back on its feet after the economic downturn, or what she termed "the yoga crisis."

Like most businesses, yoga studios likely would pass the sales tax on to the customer, forcing prices up.

West added, "It is important to the city that we have stress-relieving activities that are affordable to all levels of income. Something like this is a threat to that."

Last Monday afternoon, more than 70 yoga managers, studio owners and instructors sat down in the lotus position to discuss the tax issue -- and other troubles -- at Yoga Union, a studio in the Flatiron District.

West said the atmosphere was "concerned, dynamic and productive."

SOURCE: WSJ.COM