A new tax proposal in Washington, D.C., has yoga instructors and gym owners sweating bullets in a bad way. The city is looking to implement a 5.75 percent sales tax on all health club services, including gyms and yoga studios, as part of its 2015 budget, and industry members are worried that it could turn away new customers.
"This feels like a tax on healthy lifestyles," said Betsy Poos, co-owner of yoga studio in Southeast D.C., in an interview. The tax would place and extra 69 cents on her $12 hourlong classes and another dollar on classes of 75 and 90 minutes. Although she doesn't believe the tax would cause current members to stay away, it could be a turnoff to new students who are already stretching their budgets for a membership. "In the past five months, 25 percent of our sales revenue has come from consumers brand new to our studio—first-time walk-ins."
Poos isn't alone in her protest. Multiple organizations have come together to protest the tax initiative, including the Capitol Hill Association of Merchants and Professionals (CHAMPS), Capitol Hill's Biker Barre, and a bevy of local CrossFit Trainers.
D.C. Council chairman Phil Mendelson has defended the bill, saying its not specifically targeting fitness locations but is part of an overall package aimed at revising the individual income tax. Other businesses listed in the initiative include bowling alleys, billiard halls, water delivery services, and car washes, among others. "The goal of the [tax initiative] was to recommend an overall tax structure that is fair, equitable, and reduces the overall burden on District residents," says Mendelson.
Still, D.C.'s fitness entrepreneurs believe the tax could have an adverse affect on their business and the overall well-being of the city. "If a doctor prescribes you a pill, there's no sales tax," said Yoga Flow co-owner Ian Mishalove. "If the doctor prescribes you yoga, there's a tax."