To the outrage of many yoga and fitness buffs around Capitol Hill, a new 5.75 percent tax on health club services, including gym memberships, survived a D.C. Council vote on Tuesday.
A crowd of tax opponents sporting neon yellow T-shirts cheered Councilmember David Catania's introduction of an amendment to the city's budget that would have killed what he called a "counterproductive" and "wrongheaded" measure that burdens healthy behavior.
The applause that filled the packed chamber was quickly hushed by Council Chairman Phil Mendelson, who spoke in favor of the "yoga tax," and predicted the fitness industry would fare just fine. Sales taxes on alcohol and restaurants haven't slowed D.C.'s dining boom, Mendelson said. In the end, Catania's amendment was defeated by a 9-4 vote. "I'm also voting to tax myself," said Councilmember Vincent Orange during debate of the measure. "Everybody knows I've been working out religiously for the past two-and-a-half years," he added, boasting his Washington Sports Club membership.
Councilmember Jack Evans, chairman of the Committee on Finance and Revenue, fears small fitness industry businesses will take a hit on Jan. 1 when they have to absorb the fee or raise rates. "If we are true to ourselves and do support small business, you wouldn't support this tax," he said, calculating the tax revenue only about $4 million of the city's $10.6-billion budget for fiscal 2015.
By approving the proposal, the District joins 22 other states who already apply a tax to health club memberships, according to Councilmember Mary Cheh, who voted to keep the tax in the budget. Following the line of reasoning, other tax policy experts have used to defend the measure, Cheh said D.C. residents already pay sales tax on their yoga mats, running shoes and other fitness gear.
Cheh accused health industry businesses of trying to make the city fall prey to "phony labels," in their quest to kill the tax.
For a place that's been ranked the fittest jurisdiction in the nation, "adding nearly 6 percent onto the cost of being fit matters," argued Catania, who is also running for mayor as an independent.
Mayor Vincent Gray is also against the tax on gym memberships, saying whatever modest amount of revenue the city collects in the short term will be offset in the long run if D.C. taxes fitness.
"I do not support a tax on healthier living," Gray said in a memo to the council.
Following the vote, Catania vowed to repeal the tax in fiscal 2016 if he is elected mayor.