Horses

NJ Assembly Votes To Exclude Horse Boarding From Sale Tax

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Stalls used to house horses are currently subject to sales tax in New Jersey. A bill passed in the Assembly would change that. Credits: Lillian Shupe
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TRENTON, NJ — A bill that would eliminate the sales tax on horse stall rental has cleared the New Jersey Assembly.

The bill, A1045 was introduced in January and some amendments were made before it was released from committee. The Assembly voted on June 7, 72-0 to approve the measure with one abstention and seven members not voting.

“There has been ongoing confusion in the industry about tax responsibilities, and as a result, stables and services have closed up shop and abandoned the state,” said primary bill sponsor, Ronald Dancer (R-Ocean), who has been pushing the measure since November 2013.

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Separately stated charges for stall rental became subject to sales tax on Oct. 1, 2006. Such charges are treated as the “furnishing of space for storage.”

The bill clarifies the sales tax collection responsibilities of horse-boarding businesses in New Jersey by providing an exemption from tax for the lease or rental of certain stable stalls and charges for horse boarding and certain other related services.

According to the bill statement:

Under the amended bill, the taxable service of “furnishing space for storage” is redefined to exclude from tax charges for the lease or rental of certain stable stalls. The bill provides that the service of “furnishing space for storage” does not include, and the taxable service therefore does not apply to, charges for the lease or rental of a stall in a barn, stable, or other similar structure or facility for the boarding or stabling or for the keeping or holding of a horse, pony, mule, donkey, or hinny.

The tax exemptions would apply to taxable years beginning on or after Jan. 1 following the bill’s date of enactment.

“Horse-related business plays an important role in our state’s economy,” Dancer said, “Establishing clear sales tax guidelines will save New Jersey jobs and businesses. Horses are farm livestock, not ‘storage units’ in a warehouse.”

In its fiscal analysis, the Office of Legislative Services (OLS) concluded that this bill will result in an indeterminate annual decrease in sales and use tax collections. The OLS reported that it cannot independently estimate the annual amount of sales and use tax revenue which will be lost since it does not have access to relevant industry data regarding the number of horse-boarding businesses in the state which are currently subject to the sales and use tax. The OLS does not have the average cost for providing boarding and additional services to horses in the state, and the average number of stalls a barn, stable, or other similar structure or facility each horse-boarding business leases or rents, which are essential to providing an estimate.

The measure will next have to go through the State Senate.

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