"Yoga Tax" Stays in DC Budget. Here's What It Means for Your Workout.Despite weeks of toned, flexibl...

1. “Yoga Tax” Stays in DC Budget. Here’s
What It Means for Your Workout. | Local News
"Yoga Tax" Stays in DC Budget. Here's What It Means for Your Workout.
Despite weeks of toned, flexible protestors jamming Freedom Plaza and even a stipple portrait of a
woman in a power vinyasa position on the front page of the Wall Street Journal, the District's so-
called "yoga tax" survives.
Starting October 1, gym memberships, fitness classes, tanning salons, car washes, water deliveries,
carpet cleaners, storage lockers, and bowling alleys will start adding a 5.75 percent sales tax to their
services, under a fiscal 2015 budget the DC Council is set to approve Tuesday. Although the sales
tax expansion clearly covers much more than personal wellness regimens, all the public opposition
came from the fit set. A group of several dozen gym rats attended today's Council session, dressed in
neon green T-shirts reading "Don't Tax Wellness."
Council member David Catania tried to derail the sales tax with a last-minute amendment that even
got the support of his mayoral rival, Muriel Bowser. Only two other members voted for the
amendment, meaning that, with the budget's passage, gym memberships and carpet cleanings will
cost a bit more starting next year. Here's what it means for you:
Why is the Council doing this? Is this a war on the physically fit?
Uh, no. A tax-revision commission last year led by former Mayor Anthony Williams suggested
numerous changes to the District's tax code. Williams, who liked to show off his beach body when
kicking off public pool season while he was in office, recommended lowering income taxes for most
individuals and businesses, but the lost revenue would need to be offset by other taxes. The new
sales taxes are expected to put $67 million back into city coffers.
Income tax cut? That sounds good.
District residents who earn up to $1 million will start seeing local income tax cuts in 2015. The rate
for workers who earn between $40,001 and $60,000 will decline to 6.5 percent, residents who make
between $60,001 and $350,000 will pay 8.5 percent. Currently, anyone earning between $40,001
and $350,000 pays 8.5 percent. People who make between $350,000 and $1 million will pay 8.75
percent, a .2 percent drop, while incomes over $1 million will stay taxed at 8.95 percent.Â
The tax cuts will phase in over a five-year period. When they take full effect, someone making about
$75,000 a year, for instance, will see about $800 additional in their bank accounts. That's a nice
chunk of extra cash you can spend on things like gym memberships.
Former Mayor Anthony Williams led the tax-revision board that came up with the so-called "fitness
tax." Photograph via DC.gov.
Seriously, though. Isn't taxing gym membership going to turn DC residents into a bunch of fat slobs?
Probably not. For starters, the District is relatively healthy compared to the rest of the country, with

2. an adult obesity rate of 21.9 percent, according to the Robert Wood Johnson Foundation. (Only
Colorado is trimmer.) But even adding a slight sales tax to gym memberships and fitness classes
does not constitute a full-scale attack on the wellness industry, says Jenny Reed, the policy director
for the DC Fiscal Policy Institute, which supports the tax revisions.
"If gym membership is $70 a month, we're talking about adding no more than $4 a month," Reed
says. "What we're talking about is broadening the base of the sales tax so we can lower the overall
tax base."
Under the full tax rewrite, the effective tax rate for all DC taxpayers drops from 4.9 percent to 4.5
percent.
Reed also notes that in the bigger picture, there's not really any such thing as a free workout. People
running on the Mall still pay the taxman when they buy their gear.
"When you buy those running shoes, you pay sales tax," she says. "And that hasn't deterred people
from running."
What does Mayor Vince Gray think?
Gray is pretty down on the Council's budget overall. He's steamed that it slashes long-term funding
for the streetcar, but Council Chairman Phil Mendelson has said the streetcar has been overfunded
for years. Gray's no fan of the "fitness tax" either.
"I do not support a tax on healthier living," Gray writes in a letter to Mendelson. "Whatever modest
amount of additional revenue we take in in the short term, we will end up paying far more in the
long run if we tax fitness."
Council member Jack Evans says the sales tax expansion is "making us a joke." Is he right?
He should look for better sources of humor. Twenty-two states tax gym memberships, including
Minnesota, Connecticut, New Mexico, and Hawaii, which all rank in the top ten of least obese states.
But a national paper like, say, the Wall Street Journal, putting DC's "fitness tax" debate on A1 makes
for good fodder. You know which city already applies sales taxes to gym memberships? New York,
home of the Wall Street Journal.
What about gym owners who say a sales tax will thin their membership rolls?
Hey, if it does, at least you won't have to wait in line for the Nautilus machine. But Reed says that's
unlikely. Besides, gyms are businesses, too, and they're getting a tax cut as well. Along with the
sales tax expansion and personal income tax cut, the District's new budget also reduces the business
income tax from 9.975 percent to 8.25 percent.
The tax revisions are supported by DCFPI, a left-wing think tank, and the DC Chamber of Commerce,
two groups that rarely agree on anything. Council members received a letter Monday signed by
Williams, DCFPI executive director Ed Lazere, and Chamber of Commerce CEO Harry Wingo urging
them to keep the rewrites intact, "fitness tax" and all.
"I'm not sure there's ever been a joint letter," Reed says.
So is the debate over?

3. Eh, maybe not. As soon as his amendment failed, Catania pumped out a statement saying that if he's
elected mayor, his first budget will remove the sales tax on gyms. "As mayor I will submit an FY16
budget that will repeal the Wellness Tax," he writes on Twitter.
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what-it-means-for-your-workout.php