Bill Would Eliminate Horse Sales Tax in Kentucky

Two Kentucky lawmakers have introduced legislation that would eliminate the sales tax on horses purchased in Kentucky.

Democratic Reps. Susan Westrom and Royce Adams filed the bill the week of Jan. 9. It amounts to changes in existing tax law tied to the horse industry. The 6% sales tax on stud fees would remain intact; that revenue now goes to fund breed incentive programs authorized by the legislature in 2005.

The bill calls for elimination of the 6% tax on horses claimed at Kentucky racetracks, as well as the tax on horses sold at auction. Currently, Kentucky residents must pay the tax on horses under the age of two purchased at sales, while people from out of state do not have to pay the tax.

The Louisville Courier-Journal reported the suggested changes would remove $2 million to $3 million from the state's general fund at a time when funds are tight.

Earlier, Republican Sen. Damon Thayer said he hoped to introduce legislation during the current General Assembly session to exempt horse feed and other supplies from state and use taxes. The taxes don't apply to other types of farming.

Some legislators and members of the Kentucky Equine Education Project have made tax parity for the horse industry one of their legislative goals.