Exemptions and Other New York Sales Tax Issues for Yoga Facilities
Operating a yoga studio or related health facility can be a challenge when it comes to complying with New York sales tax. You or your clients could different applications of sales tax rates at the state and local levels like in New York City. Learn when New York sales tax may apply to charges for yoga instruction and how other sales at your facility may be subject to or exempt from tax.
How New York Sales Tax Applies to Facilities That Offer Yoga Classes
The state of New York does not generally impose state sales tax on dues, membership fees, and other charges for access to health and fitness facilities (except for athletic and social clubs). This is a broad category that includes yoga studios and most other places where you offer exercise equipment or other health-related services such as:
- Pilates or aerobics studios
- Weight loss programs
- Spas, saunas, and Turkish baths. See TB-ST-329.
While the state exempts sales tax on health and fitness facility charges, New York City’s local sales tax rate will apply. Facilities that solely offer yoga instruction, however, are the exception to this rule because the New York Department of Taxation and Finance does not consider yoga as an exercise activity. This guidance comes from advisory opinion NYT-G-12-(1)S), which further explains that yoga classes are not taxable because the focus is not on physical exercise but is on other activities like “meditation, spiritual chanting, breathing techniques, and relaxation skills”.
Despite the general exemption from local NYC sales tax for yoga classes, it may not apply if your facility offers other uses that would subject it to sales tax. For example, a New York City gym that offers a variety of classes (e.g., Pilates, aerobics, weight training) in addition to yoga will likely have to charge sales tax for its membership or use fees. A facility that only offers yoga instruction, in comparison, should be exempt from collecting and remitting sales tax on its related charges. If you have questions about how sales tax applies to your charges for yoga instruction, consider a consultation with our sales tax professionals.
Other Goods and Services at Your Yoga Facility Are Subject to NY Sales Tax
Your charges for access to yoga classes or use of a facility are not the only items where sales tax could be at issue. If you offer the sale of other items, you may need to collect and remit sales tax. For example:
- Bottled water and other beverages
- Certain food charges from a restaurant or snack bar
- Rental fees (e.g., mats, lockers, or training aids)
New York Sales Tax on Purchases of Yoga Clothing and Apparel
If your yoga studio or facility also sells apparel and clothing items, then you may need to collect sales tax at the combined state and local rate depending on the sale price. Clothing items sold for less than $110 are exempt from New York sales tax. However, items above that sale price will be subject to tax (See TB-ST-530). Your yoga studio may sell both exempt and taxable clothing items, so keeping track of your sales tax obligations in this area is essential for avoiding underpayments of tax.
Need New York Sales Tax Help with Your Yoga Studio or Other Fitness Facility?
To recap, yoga studios are generally exempt from both New York state and New York City sales tax. However, if you operate a facility in New York City that offers yoga classes among other taxable items (e.g., Pilates or spa services), then local sales tax will apply. Sales tax issues are not uncommon with these types of facilities because of the different applications of state and local rates in addition to your other sales that could have a variety of exempt or taxable statuses.
When concerns about sales tax compliance arise for your yoga facility, our team of professional consultants are here to help. We offer a cost-effective solution for managing all phases of sales tax issues including audits, assessment protests, and claims for refunds or credits. Engage the help of a sales tax professional today and get your compliance with the New York Department of Taxation and Finance back on track.
Schedule a free consultation with Sales Tax Helper today.