Yoga Taxes New York State

Posted on by nadayogi

DISCLAIMER: THIS DOES NOT CONSTITUTE LEGAL ADVICE OR THE CURRENT OPINION OF ANY CITED SOURCE. IF YOU HAVE QUESTIONS, PLEASE SEEK COUNCIL WITH YOUR TAX ATTORNEY AND/OR CERTIFIED PUBLIC ACCOUNTANT.

All business receipts from the services provided by “weight control salon, health salon, or gymnasium” facilities are subject to local sales tax 1 . However, the facility that offers only instruction in Yoga is not a “weight control salon, health salon, or gymnasium” 2 . The charges by Company X for the use of its facilities do not constitute charges for admission to a place of amusement. Therefore, its fees are not subject to sales tax on admission charges 3 . The customers do not control any social or athletic activities, do not participate in the management of the facility or in the selection of other participants, or possess any proprietary interest in Company X. The number of participants is restricted solely because of the physical size of the facility. Therefore, Company X’s facilities are not social or athletic clubs 4, 5, 6 . Accordingly, Company X’s charges are not subject to tax as dues paid to social or athletic clubs 7 . Yoga is not specifically taxed under special consideration 8 . Yoga and Pilates are treated separately. Yoga is not an “exercise activity,” while Pilates is an “exercise activity” and is subject to New York City Sales tax 1 . By offering Pilates, the facility qualifies as a “gymnasium” 9, 18 . If Yoga classes are taught in a facility that provides exercise equipment or Pilates classes and otherwise qualifies as a health and fitness facility, the charges for Yoga instruction are subject to New York City’s local sales tax. If you sell tangible personal property anywhere in New York State, you must register for sales tax purposes, collect tax, and report these sales as instructed on your sales tax returns 18 .

“We conclude 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.”

– New York State Taxation and Finance 2012

Company X’s retail sales of non-clothing products (mats and other accessories) are subject to both the State and local sales taxes unless an exemption applies 10, 11 . If Company X rents mats, those rental fees are also subject to State and local sales taxes. Effective April 1, 2012, Company X’s sales of items of clothing are exempt from the State and New York City local sales taxes if the item is sold for less than $110. Articles of apparel sold for more than $110 8 . Fees paid by members to store their mats are subject to State and local sales tax 12 13 . Real Property tax exemption is possible based on the type of organization, subject to Senate and Assembly approval. See Yoga Anand Ashram, Amityville, Babylon, Suffolk 15 and Foundation for Study of American Yoga and Tibetan Buddhist Doctrines Inc 16, 20 . Yoga as a religious philosophy is not a conventional religion. But, as one court has said, the “legal status of the realtor’s corporation purposes is not altered by the fact that its doctrines are unconventional. 21 ” In Addition, it doesn’t need to be a recognized religious sect or denominational church 22 . Nor does the fact that physical training is a purpose disqualify it when this activity is strictly in furtherance of the primary objective.

You may purchase products that you intend to resell to your customers, such as Yoga mats, bottles for water or other beverages, gym bags, towels, fitness apparel, and training aids that you intend to resell to your customers without paying sales tax by giving your supplier a Form St-120 18, 19 . All equipment purchases for use in your business are subject to state and local sales tax at the time of purchase.

As a Yoga teacher, depending on whether you’re a contractor and treat expenses as a business expense or an employee and treat business-related purchases as a job expense, you can deduct specific classifications of purchases from your tax liability. For example, Independent contractors may be able to deduct the cost of items such as these on a Schedule C Federal tax form:

  • The percentage of the monthly costs of maintaining your home, if you have office space there dedicated solely to your Yoga business.
  • Yoga professional memberships (Yoga Alliance, YogaGlo and Gaiam)
  • Malpractice and liability insurance
  • Legal and professional services
  • Music and music subscriptions for classes (CDs, iTunes Music, Spotify, and Pandora)
  • Aromatherapy, essential oils, and supplements for classes
  • Yoga certification fees and training expenses
  • CPR training and certification required for teaching Yoga
  • Yoga website subscriptions for your business (e.g. YogaGlo)
  • Continuing Yoga education (Yoga and meditation workshops, classes, and seminars)
  • Yoga apparel for teaching your classes

If you’re an employee, you could fill out a Schedule A form and follow the guidelines of the filing.

References:

  1. Section 11-2002(a) Administrative Code
  2. NYT-G-12(1)S (2012) Application of State and Local Sales Tax to Facilities that Provide Yoga Instruction. New York State Department of Taxation and Finance
  3. 1105(f)(1) Tax Law. New York State.
  4. TSB-A-00(26)S (2000) Advisory Opinion. New York State Department of Taxation and Finance.
  5. 1101(d)(13) Tax Law. New York State
  6. (5)(7) 527.11(b) Sales and Use Tax Regulations
  7. 1105(f)(2) Tax Law. New York State
  8. 1105(c.) New York State Tax Law
  9. NYT-G-08(2)S (2008) Taxability of Fees Paid for Pilates Classes and Personal Instruction at Weight Control Salons, Gymnasiums, and Similar Establishments in New York City.
  10. 1105(A) Tax Law. New York State
  11. 1210(a)(1) Tax Law. New York State
  12. 1105(C ) Tax Law NYS
  13. TSB-A-08(64)S (2008) Advisory Opinion Storage Fees
  14. TSB-M-12(3)S State and local taxes on clothing and footwear
  15. Summary of 2004 Real Property Tax Legislation
  16. Cumulative Index
  17. ST-615 (TB-ST-615)
  18. New York City Health and Fitness Facilities
  19. Form ST-120
  20. Opinions of Counsel SBEA No. 58
  21. People ex rel. Watchtower Bible and Tract Society v. Mastin, 191 Misc. 899, 80 N.Y.S.2d 323
  22. People ex rel. Outer Court of the Order of the Living Christ v. Miller, 161 Misc. 603, 292 N.Y.S. 674, aff’d 256 App. Div. 814, 10 N.Y.S.2d 208, aff’d 280 N.Y. 825
  23. Buffalo Turn Verein v. Reuling, 281 N.Y.S. 545
  24. TSB-A-14(18)S (2014)
  25. Tax Deductions
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