Bill > A4165

Introduced Session

This bill clarifies the sales tax collection responsibilities of horse boarding businesses in New Jersey by providing an exemption from the sales and use tax for the lease or rental of stable stalls and charges for horse boarding and other related services. Under the bill, the taxable service of "furnishing space for storage" is redefined to exclude from tax charges for the lease or rental of 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 bill similarly exempts from tax charges for boarding a horse. The bill provides that charges for storing a horse, pony, mule, donkey, or hinny in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the sales tax. In addition, the bill exempts from tax services that are provided for the care of horses, ponies, mules, donkeys, or hinnies boarded by persons engaged in the business of boarding horses. The bill provides that charges for maintaining or servicing a horse, pony, mule, donkey, or hinny that is boarded or stabled or that is kept or held in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the sales tax. The bill takes effect immediately and applies to lease and rental agreements entered into, and to charges for services rendered, on or after the first day of the first month of the first calendar quarter beginning at least 90 calendar days after the date of enactment. The bill provides transitional rules that apply to agreements covering periods beginning and ending before and on or after the date the exemptions provided by the bill first apply. The purpose of this bill is to clarify the tax collection responsibilities of horse boarding businesses, and to provide for a more equitable treatment of livestock kept under the care of farmers in this State. The Division of Taxation in the Department of the Treasury has failed to provide clear and consistent guidance on the taxability of boarding and other services provided to horses that are boarded for a variety of different purposes by different types of boarding businesses, and has adopted rules and regulations that have led to differences in the tax treatment of boarding horses in comparison to other livestock that receive more favorable treatment as farm animals. These actions have created confusion within the agricultural community and increased the cost of doing businesses for horse boarding and other farm businesses attempting to maintain compliance with current law. The actions have also placed New Jersey horse boarding and other farm businesses at a competitive disadvantage with similar businesses in surrounding states that do not require businesses to collect tax on charges for boarding horses. By providing an exemption for all horse boarding and related services, this bill eliminates the confusion and reduces the overall cost of doing business within this State. Moreover, by providing an exemption, the bill levels the playing field for New Jersey horse boarding businesses and their out-of-State counterparts, and provides for a more equitable treatment of all livestock kept under the care of farmers.

AI Summary

Committee Categories

Alex Sauickie (R)*, 

Introduced, Referred to Assembly Commerce, Economic Development and Agriculture Committee (on 04/08/2024)

Official Document