YOGA IS SPIRITUAL...THEREFORE NOT SUBJECT TO NEW YORK SALES TAX

This past year, New York issued guidance on the subject of whether Yoga or Pilates classes are subject to sales tax.  They issued NYT-G-12(1)S which is an informational statement of the Department's interpretation of the law, regulations, and Department policies. 

The crux of the guidance involved whether a Pilates and/or Yoga studio constitutes a “weight control salon, health salon, or gymnasium” which would subject it to the local sales tax under Section

11-2002(a) of the Administrative Code of the City of New York (Administrative Code).   

The guidance gave the following information:

A gymnasium is commonly understood to be an indoor facility where sporting and/or exercise activities take place. According to this guidance, Pilates classes constitute exercise activities, therefore the facility would be considered a gymnasium, and the services are subject to sales tax.

However, they concluded that instruction in yoga is not an exercise activity because yoga generally includes within its teachings not simply physical exercise, but activities such as meditation, spiritual chanting, breathing techniques, and relaxation skills. 

If the facility has both Pilates and Yoga, all of the sales of services at the facility are subject to sales tax because the facility is considered a gymnasium.  If the use of the facility is exclusively to teach yoga forms and techniques, the facility will not be considered a weight control salon, health salon, or gymnasium. Therefore, the charges for yoga instruction by this facility are not taxable.

Brian Gordon's STATEment:
I find this guidance to be very generous to the yoga industry.
From my research and experience, I have found that not all yoga classes involve meditation and chanting.  Yoga primarily involves strenuous exercise. I also found that pilates, similar to yoga involves breathing and relaxation techniques, and also involves strenuous exercise.  If you check NYT-G-12(1)S you will see that this guidance came about at the request of a business that offers both pilates and yoga at most of their facilities.  This is not surprising given the similarity of the two forms of exercise. 

What makes the guidance more puzzling is that while yoga is not taxable in a facility by itself, it becomes taxable if offered in a facility that also offers pilates.  What about pilates and a dance class?  Both taxable?  Yoga and a dance class? Both not taxable? 

While New York Tax Laws and policies are sometimes perplexing, it is most important to know what these rules are, so that we are able to comply with them, or if under audit, we know how to defend our position. 

For a free phone consultation on this or any other tax issue or concern, please call
Brian Gordon, CPA at (516) 510-6041 or email at bgord520@gmail.com.

Brian Gordon, CPA, is a state and local tax consultant in private practice. Previously, he was with the NYSDTF for more than 30 years, most recently as a District Audit Manager in Manhattan and Brooklyn. He is a member of the NYSSCPA New York, Multistate & Local Taxation Committee and writes and speaks on various tax issues. He can be reached at bgord520@gmail.com or (516-510-6041).   

He also posts a monthly blog called Brian Gordon's STATEments at http://gordonstate.blogspot.com.ance or audit issue feel free to call Brian Gordon, CPA at 516-510-6041 or email at bgord520@gmail.com.