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Yoga is Not Exercise, State Rules in Tax Decision

By DNAinfo Staff on July 26, 2012 5:41pm  | Updated on July 27, 2012 3:20pm

NEW YORK — Is yoga keeping you fit?  The state Department of Taxation and Finance doesn't think so. 

Yoga studios in New York City are exempt from paying city sales tax because yoga isn't officially considered exercise, state taxation officials announced Tuesday.

"We looked into the history and origins of yoga and found that it was more meditative and spiritual rather than fitness," said Geoffrey Gloak, spokesman for the state Department of Taxation and Finance, which administers sales tax on the city's behalf.  

That focus on spirituality sets yoga studios apart from facilities that have to pay taxes, like "a weight control salon, health salon, or gymnasium," according to state guidelines. But if a yoga class is taught inside a gym or fitness studio they will have to pay taxes, officials said.

Earlier this year, the finance agency began doing audits on yoga studios and threatened to charge years of back taxes at 4.5 percent per year, according to reports.

"We do see this as a fairness issue," Edward Walsh, who spoke on behalf of the tax department at the time, told The Wall Street Journal.

"Businesses that provide similar services should be subject to the same taxes in the city," he said, according to the WSJ report.

There is no state tax collected on either yoga studios or exercise studios, the State Department of Taxation and Finance said.

City yoga studios hailed the Finance Department's decision, which came after a backlash from yoga instructors and advocates.

Marcela Xavier, director of Bread and Yoga in Inwood, said she believes a lot of studios would have gone out of business if they had to pay sales tax.

"Many of my clients would be affected by an increase," said Xavier, who added that she would have instituted a $4 hike in her per-class fee, bringing it to $22, if the studio had to pay the tax. 

While power and fitness yoga are common in the city, Xavier believes there are greater depths to the practice.

"I think the bonus of yoga is physical activity," she said. "Because it's a holistic discipline, the promotion of health comes not from physical activity, but the practice of meditation and breathing."

But not all yoga instructors are happy with the decision.

"It's absolutely ridiculous" said Johnson Chong, director of Studio Anya that offers both yoga and Pilates classes. "To say that yoga isn't fitness is absurd."

Like yoga, Pilates is not a mindless series of exercises as one would follow in a gym or a fitness center, Chong added. Pilates uses yogic practices of breathing and concentration, as well as a focus on the connection between mind, body and spirit, he said. 

"When you come to a studio, you have a focus that is different from your intent in a gym," Chong said. "Any movement that focuses on breath and is associated with breathing is spiritual by nature."