City Yoga Studios Escape ‘Gym Tax,’ Fitness Centers Not as Lucky

Written by Alissa Fleck on . Posted in News Our Town Downtown, Our Town Downtown.


Photo Courtesy of Wiki Commons

Local yogis can continue to embrace their spiritual, physical and mental wellness for a—relatively—lower rate.

Assembly Member Linda B. Rosenthal applauded the recent decision of the New York State Department of Taxation and Finance to exempt independent yoga studios from paying the “gym tax,” city and sales tax that is imposed on other gyms and fitness centers. The decision came after the Department recently began auditing these studios and threatening to charge back taxes after finding they had not been paying up.

The 4.5 percent sales tax imposed on fitness centers would have likely caused many studios to go out of business or hiked membership prices inordinately, according to Rosenthal.

“Working with yoga studio owners, teachers and students, I advocated to State Finance that unlike a Saturday morning spin class, where the goal is to shed pounds and increase aerobic fitness, yoga is primarily a spiritual experience, the emphasis of which is on the mind-body connection,” said Rosenthal. “I am pleased that State Finance recognized the unfairness in treating yoga studios like gyms and other fitness centers.”

Sarah Platt at Ishta Yoga, which has studios in Union Square and on the Upper East Side, was pleased with the verdict. “Yoga has become quite a competitive market, and we need to do all that we can to keep prices low, especially in this economy, while still making our bottom line,” she said.

Platt said she thinks yoga practitioners prefer the freewheeling studio atmosphere to bigger gyms anyway. “It creates more of a community feeling compared to gyms, which are owned by larger corporations,” said Platt. “People who join yoga studios tend to want a place where they can connect on all levels, personally, energetically, physically and spiritually, and they are less able to get that in a corporate environment.”

Gyms big and small seemed less invested in the decision. Many gym representatives around the city knew nothing of the controversy.

Amarilis, who works at a New York Sports Club (NYSC), described being indifferent to the decision, about which she had previously heard nothing. She said there is a NYSC gym “every three blocks,” and it doesn’t bother her at all to hear yoga studios aren’t affected by the same gym tax. “I don’t care what they do,” she said, adding that her gym’s yoga classes are always full of people looking for a workout. She said she has not seen the effects of the tax.

The tax, in place since 1971, applies to fitness centers but not “movement spaces”; dance centers are exempt from the tax, for instance. The logistics are complicated, though—one employee at a small, local gym, who preferred to remain anonymous, said she believed her gym was in fact exempt from the tax as well. The sudden interest in yoga studios is apparently not so sudden; the decision to apply the tax more widely went on the books a year ago, but many yoga studios were not notified of the change until the auditing process began.

According to Businessweek, some yoga instructors blamed the decision to tax studios on the fact that yoga is a booming industry despite rough economic times.

Sean Kelleher, a managing partner at the high performance Edge Gym on the Upper East Side, which provides yoga classes but has fewer devotees, said, “I think it’s difficult to tax such a small company. We’re an independent gym, so I understand the difficulty of that. Look, do I think Equinox should be taxed? Yes. But hot yoga on Lexington and 86th that’s barely making it? I think it would be harmful.”

Andrea Dershin, a New York City-based yoga teacher with a studio, Yoga People, in Brooklyn, described the fight to keep independent yoga studios like Yoga People and hundreds of others around the city free of the “gym tax.”

Dershin said her studio, described as having a “friendly neighborhood vibe,” had been raising money to fight the tax-free cause and was following it closely with concern. Their reaction to the news? “We’re over-the-moon thrilled,” she said.

“Yoga is so helpful to New Yorkers for their mental health as well as their physical health,” said Dershin. “Taxing would make it unattainable for many.”

Dershin added that yoga can already be relatively expensive, but “yoga studios are not in the business to make money,” and the tax would be especially hard for small studios.

“Gyms have been taxed all along,” said Dershin. “The big difference is between what’s offered. Yoga is one small part of what [gyms] offer, we offer the spiritual, the philosophical, the community…gyms focus on the physical.”

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