DC gyms confused by new yoga tax

WASHINGTON (WUSA9) -- D.C.'s new gym tax, or yoga tax, that went into effect on October 1st is not being well received. In some cases, it's not being received at all.

The D.C. Office of Tax and Revenue, OTR, said they sent notices to all taxpayers impacted by the new tax, but some District health and fitness clubs claim they received no notice, guidance or clarity.

Dega Schembri, co-owner of City Fitness gym in Cleveland Park, said she was blindsided.

"Even one week ago when I found {the tax} was effective, the first person I talked to in the Office of Tax and Revenue had no idea that this was coming up October 1st," said Schembri, who said she wanted time to notify members that dues were going up.

"Five dollars, which is a significant amount," said Schembri.

On the first day of the new tax, Schembri said her gym lost a member due to that tax.

"It put his dues $5 over what he budgeted to pay and in his words, 'it was the final straw,'" explained Schembri.

The OTR told WUSA9 that a broad range of health clubs will be taxed but only some fees within those club will be subject to tax, including membership and daily entrance fees as well as exercise and yoga classes. Not included are some personal training services.

"It's very confusing," said Schembri.

Steven Reichert is an independent personal trainer who rents space from City Fitness to train his clients. He said he's receiving conflicting messages from the city.

"I was sent a notice from the city that personal training services were not taxable. Now, we're getting verbal confirmation from the office of tax and revenue that contradicts that," explained Reichert.

Schembri echoed the contradictions she claims to have received from the city.

"Our {gym} members hire our staff to personal train them and of course we get a percentage of that training. Because we get a percentage of that training, according to the {OTR}, we're taxed. According to the language in the paper they gave us, we should not have to pay a tax. We have contract trainers who come in with their own clients, who pay the contract trainer and the contract trainer pays us. According to {Councilmember} Jack Evans office, they would not have to pay us because it's a rental. According to the Office of Tax and Revenue, they do," explained Schembri.

In an email statement, the OTR explained that "Personal training services, when performed by a health club, will be subject to the health club services tax."

"There's a lot of complexity to how we work, the types of employees and contractors that work in gyms and I don't think the city fully understands that that whole structure," said Reichert.

D.C. Mayor Vincent Gray attempted to veto the budget that included the new tax only to have city council override that veto, subsequently passing the gym tax and several others.


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