Does NY impose a sales tax on horse boarding?

Recently, questions have arisen regarding whether New York also has a sales tax on horse-boarding.  This post will provide a very brief discussion of my position on the issue.

First, I must say that I am NOT a New York attorney, having never applied for admission to the NY bar.  I am licensed to practice in the states of New Jersey and Virginia; I will not practice law or give legal advice in the State of New York. This post is for informational purposes only and should not be construed as providing legal advice. 

It appears that New York requires sales tax to be collected by “commercial” horse boarding operations on services that are performed in connection with the “Care, Custody and Control” of the horses.  In order to be considered “commercial,” a farm must meet all of the following requirements:

1) a minimum of 7 acres in physical size;
2) board at least 10 horses; and
3) must gross a minimum of $10,000 annually.

So, smaller operations (like many of New Jersey’s family-owned/operated boarding facilities) do not appear to be required to collect/submit the tax!  This is NOT the case in New Jersey – our tax on boarding applies to all horse boarding facilities, with NO regard for income, size of facility, number of horses, etc. Many of my clients would not be facing back tax liabilities or ongoing obligations if this was the case in New Jersey.

Also, in NY, farms that are primarily used for racing purposes are NOT deemed to be commercial horse boarding operations.  Again, this is NOT the case in New Jersey.

In addition, a hearty portion of the sales tax collected by horse boarding operations in NY is often payable to the local county.  This is NOT the case in New Jersey, where sales tax is handled at the state level.

For these reasons, I believe that the taxes being levied in NJ and NY are very dissimilar.  I can understand why people may believe, at first glance, that the sales tax in NY is comparable to the sales tax in NJ, since money is still being paid. However, based on the above analysis, it is clear that the two states’ sales tax requirements are very different in nature.  Quite frankly, I wish the situation in NJ was similar to that in NY!  If that was the case, racing barns and smaller boarding facilities would not be responsible for collecting this tax and we would not be seeing nearly as many facilities go bankrupt, close their doors, etc.  And we would not be losing nearly as much business to our surrounding states.