Has any buyer ever paid (or seller collected and remitted) State sales tax on a horse transaction? In my state, this is applicable and I imagine is so in most states (except those that have no sales tax). I have never been asked to pay it on top of the price, but I am wondering how the larger community handles it (if at all). Thx.
not here nor is feed
Sales of horses are exempt from Texas sales and use tax under Tax Code Section 151.316 (a)(1). Horse feed. Sales of horse feed, including grain, hay and supplements, are exempt under Tax Code Section 151.316
What state are you in?
also this a little more complicated as many states have an economic threshold of sells before a tax is collected on a sale
You can usually find a list of Sales Tax exemptions on your State’s website.(19 pages of them in my state) Agricultural exemptions are usually allowed to encourage production of agricultural products. Sticky questions are; Are equine activities “agricultural” and are horses “livestock”.
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We’re in Illinois and actually had the IRS threaten to audit us over not paying sales tax on a horse we bought.
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‍:dash:
I always pay sales tax on the horses I sell. Uncle Sam would not be happy with me if I didn’t.
But the tax on breeding stock (or horses who could be used in a breeding program) is way less than those that cannot.
Even so, I pay at least a couple thousand to the government after I sell a horse and I do not charge it to the buyers.
I’m in WA state and I have paid it for horses I have bought here.
well the Uncle at this time does not charge a sales tax (or a value added tax VAT) it is your State collecting said tax …and varies greatly by states Cal only taxes Race horses, any horse that has set foot on a track for a race is a race horse in their narrow eyes
If the horse is sold as an investment having held it less than two years its gain is tax by the feds as regular income. if held greater than two years its gain is tax differently
might consult your CPA or Tax Attorney
Yes, you are correct. It is the state. And thank you for the suggestion, my tax attorney certainly understands it a lot better than I do 
It will depend on your state, city, and county. So you need to check the laws/regulations for all.
Also, pay attention if there is a CAP on the tax. (the max you pay)
I would say the vast majority of people (even other business owners) have no clue what correct sales tax to charge. As a business owner myself, I’ve had to correct companies on certain equipment purchases when they tried to over-charge me for sales tax. You can, also, request a refund/credit through your state, but it’s so much easier to just pay the correct amount in the first place.
I also once had a photographer try to charge me sales tax for digital photos. In my state, there is no sales tax on that. (only hard copy prints)
Know your laws!
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According to this if you’re in WA state there is no tax for breeding stock:
"Retail sales tax must be collected on all retail sales of geldings, spayed mares, registered horses not used for breeding purposes, and nonregistered horses.
“An exemption from the retail sales tax is granted for sales of horses, registered with a nationally recognized breeding association, when they are purchased for breeding purposes”
A portion of it is waived, yes, but not all of it (i.e. the retail sales tax waived, but not the additional taxes on top of that). And yes, I have always filled out the form you linked to.
But bottom line is that you are still required to pay tax when you sell breeding stock. Not a whole lot more detail I can add beyond that because it’s been a couple of years since I went through the process last, but possibly not an issue if you’re not a business selling a horse? I rely on my (very-experienced-with-horse-businesses) accountant/tax guy, and have worked through the online form many times in the past.
TL;DR if you live in WA state, do not read this thread and let the take home be that you’re exempt from paying any taxes at all. The DOR website has a lot more information than just the exemptions.
Always
I bought William Tell at an auction (not THAT kind, a reputable Ranch Horse Auction where high-dollar cutting/sorting reining and roping horses were sold --and William --he was not exactly high dollar). Anyway, I’d just finished a contract and had been handed $4K that was unexpected. I took my $4K and went to the auction, saw William and decided to buy him (bid on him) --all this was over the course of a month and I’d been up to the auction to ride him a few times. He was one of 3 I had decided to try for.
Day of auction, clutching my money in hand, I waited until he was ridden out (so impressive–the rider rode him through the crowd seated on folding chairs, many with umbrellas, lots of kids/confusion). He then demonstrated William could walk, trot, canter, stop, back and stand quietly while we bid --me and another person --right before $4K --the other bidder dropped out --for $4K he was MINE!
I went to pay for him and pick up his paperwork (he had a nice pedigree, but I already knew that), Coggins, bill of sale, etc. --only to find out I was about $600 short! Sales tax!!
My DH baled me out --he thought I might bid higher and had brought extra just in case.
And that was 7 years ago–great memory!
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In my state farms involved in producing horses (breeders) are exempted from sales tax on purchases of tangible personal property required to “produce”. They must charge sales tax when selling said horses, except when purchaser is reselling. They have to apply to the state for an Agricultural Tax Exemption card. (As would somebody buying the horse for resale.)
Rule 560-12-2-.55. Kennels, Stables and Pet Shops
The tax does not apply to charges for the keep of pets. Operators of kennels, stables and pet shops are required to pay the tax on purchases of tangible personal property used in such operations. Sales of horses, dogs, animals, goldfish and other pets are subject to the tax, unless purchased for resale or otherwise exempt.
