Your Workout Could Soon Be Taxed!
Despite plenty of public opposition-including a burpee flash mob, a zen protest, and a #DontTaxWellness Twitter campaign-Washington D.C.'s city council voted last week to apply a new sales tax to gym and yoga studio memberships. The tax goes into effect October 1 and will apply D.C.'s 5.75 percent sales tax to services. (That's about $4 tacked onto a monthly $75 fee, or $1.75 on top of each $30 class.)
To be clear, the tax isn't actually singling out fitness activities; car washes, carpet cleaners, storage lockers, and bowling alleys are among other businesses affected. (Currently, D.C. taxes "goods," and this expansion is designed to include "services.") But many city residents-including Mayor Vince Gray-think the city should make an exception for health-related investments. Opponents of the new tax also point out that there are still plenty of services that aren't included in the expansion, including those provided by lawyers, accountants, doctors, registered dietitians, and physical therapists.
"Certainly the amount of money generated around the fitness industry would pale in comparison to what you'd get from a tax around those legal and financial services, or even on a much smaller sales tax on all professional services," says Graham Melstrand, vice president of corporate affairs for the nonprofit American Council on Exercise, which opposes the tax.
So why did the budget proposal pass? It's backed by the D.C. Fiscal Policy Institute and the D.C. Chamber of Commerce, and supporters say that sales tax regulations need to expand to provide income tax cuts to those who need them, and to keep the overall sales tax rate from going up elsewhere. And it's not that unusual, either: More than 20 states (and some local governments, like New York City's) already apply a tax to certain types of health and fitness memberships.
The problem: No studies have been done on the before-and-after effects of such taxes on the overall welfare of residents, says Melstrand. "It's probably not enough to make a family decide not to go to the gym anymore; I think they'll pay it begrudgingly," he says. "The bigger problem is the message that it sends: that taking personal responsibility for your health through prevention isn't something that's valued."
What do you think? Tell us in the comments below (especially if you're in D.C.!) or tweet us at @Shape_Magazine.