On May 29, 2014, DC Council passed a preliminary vote on the proposed FY 2015 budget which includes a new “gym tax.” If passed under the final budget, DC exercisers will have to pay a 5.75% tax on all fitness centers and exercise classes beginning in January 2015. The final vote on this budget is scheduled for June 17. We still have time to convince Councilmembers to reject the idea.
This tax means that whether you go to a large gym or a small yoga, Pilates or other specialty exercise studio, you’ll see an increase in your cost to exercise. Here’s a breakdown of what you need to know:
- You’ll pay more: Yoga, fitness studios, and gyms will have no choice but to charge patrons the tax. That means working out in the “fittest city in the U.S.” will cost you more money.
- Public health suffers: Essentially, DC is opting to tax preventative health care. Less exercise equals greater risk for being overweight or obese or suffering from associated illnesses – all of which cost the city more money in healthcare. DC does not tax essential healthcare services, including doctor’s visits and medications. So why apply a fee to preventative services that help to keep you healthy and reduce your risk of modern day epidemics like stress, depression and obesity? Yoga and fitness are proven to improve health. it only works if people are doing it.
- Small businesses suffer: New tax = higher cost = potentially lost business for small businesses. If smaller specialty studios lose students as a result of higher costs, they may be forced to cut back on classes or hours. Small businesses lose. Those who enjoy those classes also lose.
The City Council has presented many flawed arguments for why this tax is appropriate or even justified. Here’s the thing…
Claim: The tax plan is based on the recommendations of a “Blue Ribbon” commission, which made its report public months ago, allowing plenty of time for public comment.
Reality: The Council recommendations on the budget specifics were introduced only 18 hours before the vote was taken - hardly enough time to solicit or secure reasonable feedback from citizens. Clearly people are now speaking out and the sentiment is not positive.
Claim: The overall impact of the tax package is a reduced tax burden for individuals and businesses.
Reality: While that may be true (unclear), the likelihood of individuals considering the overall personal economic impact when making day-to-day purchasing decisions is small. It's about everyday cash flow and the everyday impact on our wallets. An increase in cost for services will make an impact on individuals and businesses.
Claim: “The District, like many states, faces an eroding sales tax base as consumers shift their spending from goods to services.” So, this makes practical sense to expand the tax base for the District.
Reality: The new tax is being selectively applied to specific industries. For example, hair salons and construction firms remain exempt. Are good hair days more valuable than physical fitness? DC also has a large budget surplus, and can afford the promised tax breaks without adding a tax on yoga and fitness.
The bottom line…
DC Council Finance Committee Chairman Jack Evans said the city can do without the taxes. "I thought it was a real mistake," he said. "The city doesn't need money. We have lots of money. We're producing record surpluses."
There’s still time to take a stand against the Yoga and Gym Tax before the final budget vote. Four years ago, those who value fitness in the District stood up to a similar proposal and were successful in getting the DC Council to drop the initiative. Let’s not put our city’s health at risk over a few dollars the city doesn’t need.