State Taxing Martial Arts

So I'm from WA State. About less then a week ago I received notification that the tax code for Martial Arts in WA State was being changed from "service" to "retail" and that now we have to charge a 9.5% sales tax to the state which has to be passed onto our students.

The Dept of Revenue (IRS), essentially never informed us prior nor did the state give anyone a chance to voice opposition before passing this new law. HB 1550 in the State of WA, "Taxation of Martial Arts"....

So if you guys could, will you please on the link below, go and sign the petition to try to reverse this new law. This new law is bias in terms of it excludes (yoda, Tai Chi, and Qi Gong) but taxes all other forms of Martial Arts while labeling us "Gym facilities and training gyms"... We've always had the decency and honor of being labeled a "essential service" which meant that we didn't have to pay or charge a "sales tax".

https://www.change.org/p/jay-inslee...&utm_term=mob-xs-no_src-no_msg&fb_ref=Default

 

Respectfully, why do you think martial arts should be granted an exception? Why are you more deserving of being defined as an essential service than any other fitness class?

As for your petition - you've gone off all half cocked with regards Yoga, Tai Chi and Qi Gong - why do you think they have been protected because of their cultural significance? It seem far more likely that they have been exempted because of the health and wellness benefits that are ascribed to them outside of those caused by general physical activity. This seems a more plausible explanation, given that they only receive the tax exemption when taking place outside of a gym or fitness center. Whether or not those health benefits are real is irrelevant, they obviously convinced the bills authors that they are.

The bill was given its first reading in January and was signed into law in May. The entire process was public - if you want to blame anyone, blame the media for not reporting on it and the WA martial arts community for not noticing it was happening.

 

No one would get away with taxing Yoda!

 

It's yoda with a small "y". Different dude.

 

I get that it stinks for you as the business owner but I'd classify martial arts schools as gyms as well frankly. Certainly not essential services. Essential to what?

 

Old lesson

This is literally the definition of taxation without representation. Heads up, egg fee and you don't get a say in matter!

 

Surely if you can vote, you have representation, literally.

 

Per response to your remarks.

My first question to YOU would be does your state, country require YOU to pay a sales tax on your Martial Arts school? If not, then how would you feel if they did all of a sudden?

Yoga, Tai Chi, and Qi Gong are all forms of Martial Arts or related practices, so they shouldn't be exempt. Martial Arts is a physical form of exercise, so why exempt those?

The bill was NEVER made public and no one in our state was made aware of this bill entire about a week ago. No one in the Martial Arts community (that I know of) were made aware of this bill until just literally a few days ago. The Martial Arts community in this state was never made aware of this new law and therefore never given a chance to voice opposition.

As per your other question, Martial Arts in our state has always been classified as a "Service" exemption meaning that our industry in this state was given that definition because of the status of service we provided. If you knew anything about Martial Arts and its service, you'd know the #1 service provided is self-defense, which is in itself a life and death training.

Bottom line is this was never made public to us before this month, and no one in this state was given a chance to attend any of these meetings to voice opposition. I have to say I'm a little disappointed in your remarks with what appears to be you supporting this bias and prejudice law. More sadly, I'm surprised that more fellow Martial Artists are for this bill (outside of this State and Country) then are con. Guess the old saying is correct, "Martial Arts is truly divided, selfish, and ignorant folks) myself included...

 

Unfortunately, Our "representatives" failed to put the notice out!!

 

Exactly!!

 

That's the classification our state had us under which meant we only had to pay a flat tax. Now we have to pay our normal flat tax PLUS the sales tax.

Per essential service. Well that's simple..... How many other industries do you know that provide self-defense training to others? (That are not Military or Law Enforcement)

 

What self defence training do you cover?

 

In the UK goods and services are taxed the same, so it doesn't really make any difference to us.

 

HB 1550 - 2015-16


Jan 27 Public hearing in the House Committee on Finance at 3:30 PM.

Mar 25 Public hearing in the Senate Committee on Ways & Means at 3:30 PM.

 

In addition the bill contains the following clause

And qualifies still further that -

Self Defense is NOT the same as martial arts, and nor is it what the overwhelming majority of them provide. I venture that if that was the raison d'etre 80% of schools would close down instantly under "false advertising"

 

My club is a non-profit, so no, but if it was a for profit entity and had revenues of more than ~£50K/year, then yes, we would have to pay 20% tax on membership etc. I believe that my grading fees, tournament fees etc do include tax, because the governing body is VAT registered - but I'd have to check to be sure, and I don't care enough to do so.

So I guess their justification is that all three of those activities have a significant meditative component and that they are practiced by people for those reasons, rather than for physical activity - which is why they are only exempt if they are not taking place in gyms. If you carry out any of those activities in a gym, martial arts school or similar, you have to pay tax.

There's probably a state rep who does one or more of those activities and had the exemption written in.

I'm sorry, but just because you don't know how your legislature works doesn't mean it doesn't work. It took me two seconds to find the bill and a timeline of its passage through the legislature - which itself proceeded over a matter of months.

Yeah, I've been doing Martial Arts for almost 20 years now, the self defence argument isn't going to work on me, because I know better.

I just don't buy into the 'martial arts are special' nonsense. We are just as much a physical activity as basketball or football or baseball and we shouldn't get special treatment.

I personally think the law is stupid because America is a fat lazy country (statistically) and making it more expensive for people to move is an objectively bad decision. That said, you've also bought into the austerity hype, so saving/raising money is a big deal.

 

this thing was read on the floor of the washington state house in january. but IT JUST HAPPENED!

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1550

also, this bill was signed by the governor is may. so i can tell you're really on top of your legislature's agenda.

 

Given the amount of obesity in America the government certainly shouldn't be taxing gyms imo.

It would be better subsidising them,or at very least just leaving them alone.

That would of course presume that their citizens health and wellbeing was a priority,which it evidently isn't.

 

Yeah I get that. You had a financially beneficial and privileged status and you're upset that you've lost that. That's a perfectly predictable reaction. It just isn't a very strong argument.

If anything, yoga, qigong, and taiji shouldn't enjoy that status either. The distinction is based on the fact that legislators generally know sweet sod all about martial arts and are relying on stereotype and generalization to make their assessments. They go with the back cover blurb because they lack a more nuanced understanding.

It's simple because you're opting to present it as simple. In reality, it's far from. There's no accountability on the part of the martial arts school to SHOW that it's an essential service. To show that it conveys viable self-defense. A Modern Wushu or Point Fighting class has as much access to that classification as a legitimate self-defense course does. And, again, that's based on ignorance prompting legislators to operate based on a comic book understanding of what martial arts actually provide.

An understanding that you're fostering because of the economic benefit to you. If there were some sort of well-researched accreditation process for places teaching genuine self-defense, then perhaps. But if any Joe Sensei can slap "self-defense" on their flyers and access this benefit, then I agree with the legislators that the system was broken.

The argument about nobody being told has already been refuted. Legislation comes and goes constantly that I don't notice and don't pursue. That doesn't make it unfair because nobody made me personally aware of it.

 

Again reading the legislation, Yoga, qigong and Taiji only enjoy that status IF they are in premises where the main purpose is NOT exercise/training - I assume to allow programs to flourish in retirement homes etc