Small businesses concerned about proposed yoga, gym sales tax in - FOX 35 News Orlando

Small businesses concerned about proposed yoga, gym sales tax in DC

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A movement is growing to fight a proposed fitness tax in the District. The new sales tax on gyms, yoga studios and other athletic businesses is expected to raise $5 million a year for the city. But some are concerned it could really take a toll on their business.

The D.C. area was recently rated one of the best places in the country for fitness-minded people. Right now, your gym membership is not taxed, but a new plan by the D.C. Council is going to change all that.

Small businesses are especially concerned. Running a small yoga business with just 200 customers means every penny counts. With this potential tax, Keith Moore, the owner of Ashtanga Yoga Studio in Northwest D.C., said, “Absolutely, it concerned me because it seemed to come out of nowhere.”

Many of his clients are university students living on a fixed income.

“As a small business owner, I'm going to lose clients,” Moore said. “At some point, somebody will be priced out of the business.”

But Council Chairman Phil Mendelson seems to be standing firm on the fitness tax.

“It would be difficult to make adjustments because everything is balanced,” said Mendelson.

In an active city, it is not surprising people are upset. Many have taken to social media -- even starting an online petition to urge the council to stop the tax. But Mendelson said if you live in D.C., this new tax won't sting as much. But Virginia and Maryland residents will get hit.

“D.C. residents -- unless they are very, very wealthy -- are going to see a reduction in their tax burden even if they have a membership in a health club,” Mendelson said.

The final vote is scheduled for June 17. The fitness tax will bring in about $5 million a year. Some said that is spare change when a city has well over a billion dollars in the bank.

“It's sort of a one-two punch,” said Moore. “You’re likely going to pay higher membership fees, and at the end of the year, when you're paying taxes, you’re going to be paying taxes to cover the health care cost for those who can't afford a gym.”

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