If not removed by the D.C. Council, by January 2015 yoga classes and gym memberships will be subjected to the city's 5.75 percent sales tax.
If you're a yoga fanatic and have gotten all twisted up over a proposed expansion of the D.C. sales tax to include yoga classes and gym clubs memberships, you may not want to hear that D.C. Council Chairman Phil Mendelson isn't showing much flexibility on the issue.
"No, I don't think the Council will change it," said Mendelson today on WAMU 88.5's The Politics Hour, pushing back on calls from yogis and gym-goers alike that health-related services remained exempted from the city's 5.75 percent sales tax. He said that he hasn't yet heard of any plans from his colleagues to move against the imposition of the tax.
The tax was proposed by the D.C. Tax Revision Commission's final report in December 2013, and included as part of Mendelson's changes to Mayor Vincent Gray's 2015 budget. Ahead of a second vote on the budget on June 17, calls have come from gym owners and yoga fans to scrap the proposed tax; they argue that it will disincentivize people from engaging in otherwise healthy activities. (This week Gray said the same.)
Mendelson disagrees, telling WAMU 88.5 today that the tax is less about revenue and more about broadening the city's sales tax base, as the commission recommended. He also rejected the argument that people would be forced to give up their gym memberships or take fewer yoga classes.
"At 5.75 percent... we're just not going to see that people are going to be deterred from health club memberships," he said. "If your membership is $100 a month, and I think a lot of them are less than that, you're going to pay another $5.75. Is that really going to make or break you?"
He also said that the new tax — which was first floated in 2010 before being shot down — is part of a broader package that will see income taxes drop for a majority of residents, as well as an overall decrease in business taxes. "In terms of the health club, they're going to see a reduction in the business tax, so they can hold or lower their fees," he said.
Mendelson didn't take every recommendation from the commission, though. He left out a quarterly $25-per-head fee that would have been imposed on all employers (spare the government), rejected an across-the-board increase of the sales tax from 5.75 to 6 percent and exempted two classes of services — construction and barbers and beauticians — from the eight the commission proposed pay the sales tax.
Asked why those two were left off the final list, Mendelson said that he wanted to focus on taxes that might land on non-residents.
"We were looking in part at how much it would affect non-residents. I hate to say it, but that's often an issue, it has to be an issue when we look at the tax base. Where there are opportunities to tax non-residents — because we don't have a commuter tax and we're prohibited from that — we pursue those opportunities," he said. "I think there are a fair number of commuters who come into the city who would have a membership at a nearby gym."
And though he said it didn't factor into his decision on what services to include, he sounded a populist note. "You probably have more people with more disposable income that are members of health clubs, as opposed to everyone who has to get their hair cut," he said.