Exemption for Racehorses

A partial exemption from sales and use tax became available under section 6358.5 for the sales and purchases of racehorse breeding stock.

  • The partial exemption applies to only to the state portion of the sales and use tax rate. The exemption does not apply to any local, city, county, or district taxes. Sales and purchases of racehorse breeding stock will continue to be subject to the remaining portion of the sales and use tax rate consisting of the local, city, county and applicable district taxes.
  • "Racehorse breeding stock" means racehorses capable of and purchased solely for the purpose of breeding.
  • A retailer will be relieved from the liability for the sales or use tax subject to the partial exemption if they take a partial exemption certificate timely and in good faith, from purchasers stating the property will be used in a qualifying manner as provided under section 6358.5. The partial exemption certificate should be retained for a period of not less than four (4) years.
  • A purchaser who provides a partial exemption certificate to a retailer and who uses the racehorse breeding stock for anything other than breeding purposes, will be liable for the state tax rate, plus interest and applicable penalties. Purchasers must maintain records supporting the use of any racehorse breeding stock purchased under a partial exemption certificate.

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