ST. LOUIS — The students streamed into the Marbles Yoga studio - shoulders rolling and minds calming - as they prepared to spend an hour with their instructor inside the sun-dappled room.
For many students, the class is as much about the spirit as it is about exercise.
But for the Missouri Department of Revenue, it’s strictly recreation, and the state recently informed yogis that starting this month, studio owners and instructors must charge a 4 percent sales tax on class fees.
The tax has roiled the supposedly serene yoga world, whose supporters maintain their pastime should be exempt from sales tax as a spiritual pursuit.
“Is this only stretching? No,” said Karen Jones, who opened the Marbles studio in 2003. “I think this is just another way for the state to get money.”
Many yoga practitioners say they are confused as to how their ancient practice, which merges physical and mental disciplines with meditation, could possibly be equated with aerobic pole dancing or TaeBo workouts.
But the state - one of the few in the country to tax yoga instruction - argues that it is not infringing on religious practices and only levying a legitimate tax on businesses.
Ted Farnen, a spokesman for the Missouri Department of Revenue, said gyms and fitness centers that offered yoga classes already had been remitting the sales taxes for years, as had some yoga centers.
“It’s one thing if you’re going into a temple and doing yoga,” Farnen said. “It’s another if you’re going to a studio and paying a fee to do yoga.”
WHAT ABOUT ARKANSAS?
Most services, such as yoga classes or swimming lessons, are generally not charged sales tax around the country. That holds true in Arkansas.
“In Arkansas, the sales tax applies to sales of tangible personal property and certain services - when they’re enumerated as being taxable in the Arkansas Code,” says Will Keadle, an attorney for the Arkansas Department of Finance and Administration. “In other words, you can’t tax a service unless the statute says you can.”
Arkansas sales tax does apply to “dues and membership fees to health spas, health clubs and fitness clubs,” Keadle says. But only services named by Arkansas Code 26-52-301 (6)(A) require sales tax, and “yoga services are not enumerated as being taxable.”
(The list of named services that are subject to sales tax in Arkansas is a seemingly random assortment that includes boat storage, gutter cleaning, body piercing, dry cleaning ...)
So, Keadle says, class fees at a businessthat only teaches yoga classes would not be subject to sales tax, because “that would not necessarily be considered a fitness club.” But if that club sells items of tangible personal property - say the business sells you a mat or an outfit - then tax would apply to that sale, he says.
Also, he says, extra fees charged for yoga instruction at a health spa, health club or fitness club would not be subject to sales tax - although club dues and annual membership fees would be.
MISSOURI LAW
Arkansas law is not Missouri law. In Missouri’s case, some areas where sales tax can be applied include amusement, entertainment and recreation services, which include such disparate items as football tickets, gym memberships and concert admission.
Yoga managed to fly under Missouri’s regulatory radar until a 2008 state Supreme Court decision, which ruled that fees people pay for personal training services at a gym are taxable. When the Department of Revenue’s attorneys were reviewing the case this fall, they determined that yoga and Pilates centers offered similar types of training services. That made them places of fitness and recreation, they decided, not worship.
The Department of Revenue sent out letters informing 140 yoga and Pilates centers that they should be registered with the state and start remitting sales tax as of Nov. 1.
“We only sent letters to those that charge for their yoga or Pilates services, not to temples or other religious centers that offer yoga as part of their religious framework,” Farnen said.
The effect was quickly felt. Stacy Broussard, a yoga instructor who teaches at Urban Breath studio in St. Louis, said the sales tax had already begun to eat into her revenue.
“Money’s already tight for people and since this went into effect in November, I’m hearing more and more people say they’re hesitant to buy blocks of classes,” Broussard said. “They’re coming in less frequently to class.”
Yoga supporters have mobilized to fight back. Students banded together, along with instructors and studio owners affiliated with the Spirit of Yoga St. Louis, to protest the tax.
“Yoga is a spiritual practice. It’s not a purchase,” said studio owner Bruce Roger, a St. Louis resident who has been an instructor for 25 years. “Somehow, we need to get the state to realize that.”
Jones glanced across her studio floor, where a dozen men and women in loose-fitting shirts and cotton pants sat barefoot and cross-legged on the wood floor. Flute music played softly in the background, as the group meditated. Some quietly chanted, as an instructor encouraged the students to focus on “movements that connect earth to heart.”
“Why would you call what we do entertainment and recreation?” Jones asked.
Yoga supporters successfully have argued their case in Connecticut and Washington state. When Washington started requiring studios to charge sales tax for their classes last year, studio owners and teachers met with lawmakers and regulators to talk about how people used yoga to achieve spiritual enlightenment.
The department of revenue reversed its decision, and yoga centers are now exempt.
“After we talked, we realized they had a point,” said Mike Gowrylow, a spokesman for the Washington Department of Revenue.
Celia Storey added some information to this article.
ActiveStyle, Pages 23 on 12/28/2009