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ETA 3104 - Physical Fitness Services - Specialized Exercise and Conditioning Activities

ETA 3003 - Taxability of Yoga, Tai Chi, and Qi Gong

The Department conducted a meeting on Wednesday, November 19th in Burien with interested members of the yoga community to provide an opportunity for input and suggestions to determine whether yoga classes constitute "physical fitness services" and/or whether there is an identifiable "bright line" between yoga classes that are "physical fitness services" and yoga classes that are not.   

The Department first presented a brief background on background on the issue, explained some of the "tests" it had considered and determined unworkable, and presented a possible approach to addressing the issue.  A handout discussing the possible approach was provided to attendees and can be found here.

The yoga community was given the opportunity to provide comment and input on the issue and the possible approach provided by the Department.    

Approximately one hundred people attended the meeting, and the comments we received, both orally and in writing, were very helpful, and we are extremely grateful to those who have participated in the process.

One of the viewpoints expressed during the meeting was that the Department should exempt all forms of yoga, regardless of the location where it is taught.  The viewpoint is very much appreciated and is being taken into careful consideration.   

Additionally, a major announcement was made during the meeting:

Due to the unclear guidance that the Department has provided in this area, we will not be assessing retail sales tax for periods prior to December 1, 2008.  However, if a Taxpayer has collected retail sales tax, we will not be allowing refunds of the tax. 

A copy of a Memorandum on the issue from Leslie Cushman, the Department’s former Deputy Director, can be found here.

Excise Tax Advisory (ETA) 2034 regarding the taxability of yoga, tai chi, and qi gong and a revised ETA 2023 were issued on December 1, 2008. These ETAs were renumbered and reissued as ETA 3003 and ETA 3104, respectfully, on February 2, 2009. As you will notice, the new ETA follows the concepts and ideas that were presented at the meeting and included in the handout that was distributed at the meeting.

The blanket approach suggested at the meeting of treating all activities in which yoga is in some way referenced as not being a “physical fitness service,” i.e. “you can’t take the yoga out of yoga,” was considered. We ultimately decided, however, that the Department's guidance on this issue needed to recognize that some classes and facilities depart from the emphasis on "generally-accepted" characteristics of traditional yoga classes and instead emphasize physical fitness.

If you would like clarification about your particular business/classes after reading the ETAs, the Department encourages you to request a private letter ruling from the Department’s Taxpayer Services Division. These written responses are binding on both the Department and the taxpayer based on the facts presented if the taxpayer’s identity is disclosed.

As was announced during the November 19th stakeholder meeting, due to the unclear guidance that the Department has provided in this area and the inconsistent reporting from taxpayers, the Department will not pursue uncollected retail sales tax for periods prior to December 1, 2008.  However, because it has been our position that retail sales tax was in fact due, if a practitioner has collected retail sales tax, this tax must be remitted to the Department. 

The Department will not allow refunds for retail sales tax previously collected on these activities. This is because the Department is not authorized to refund taxes that were lawfully due at the time of payment. The Department’s position is that until November 30, 2008, the day before revised Excise Tax Advisory 2034 was issued, except for teacher training courses, yoga, tai chi, and qi gong classes constituted “physical fitness services” taxable as retail sales.

Questions or comments can be directed to Jay Jetter, Tax Policy Specialist, at (360) 570-6057 or JayJ@dor.wa.gov.