D.C. budget vote: Amendment to stop fitness tax fails - MyFoxAustin.com | KTBC Fox 7 | News, Weather, Sports

D.C. budget vote: Amendment to stop fitness tax fails

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WASHINGTON -

If you work out in D.C., get ready to pay an extra 5.75 percent tax on your fitness memberships. An amendment to stop the what has been deemed the "yoga tax" failed Tuesday morning.

The D.C. Council is voting on next year's budget. It's worth $10 billion, and includes an expansion on the city's sales tax to including a tax on gym, yoga and wellness memberships. Councilmember David Catania proposed an amendment to prevent fitness memberships from being included, but that amendment failed Tuesday. Catania, Muriel Bowser, Jack Evans and Jim Graham all voted yes to the amendment. The final vote was 9-4 to keep the fitness tax in the budget.

Even though it has been deemed the "yoga tax," other services are included in the proposed package as well, including tanning salons, storage facilities, water for consumption at home, car washes, bowling alleys and more.

Catania said if he's elected mayor, he'll make sure the fitness tax is repealed.

A source has told FOX 5's Matt Ackland that Mayor Vincent Gray is very upset about this budget, including the fitness tax, and that he is considering a veto.

D.C.'s tax code hasn't been reformed since 1998, and the tax revision commission found that it wasn't really fair-- especially to middle-income residents. The new budget proposes a new middle-income tax bracket for those making $40,000 to $60,000 per year. Their tax rate will decrease over time to about 6.5 percent.

In addition, the plan includes a reduction in the business income franchise tax, which is among the highest in the nation. The proposed budget drops that down to about 8.25 percent, which is more competitive with the District's neighbors in Maryland and Virginia.

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