Bill > S2701

Introduced Session

This bill clarifies the sales tax collection responsibilities of horse-boarding business 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. Under the 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 bill exempts from tax certain 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. The bill also exempts from tax certain services provided for the care of horses 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 retroactively to October 1, 2006. The bill establishes a refund procedure that provides taxpayers a 24-month window to apply for a refund for any taxes, penalties, and interest collected or paid in connection with eligible sales and charges between October 1, 2006 and the effective date of the bill. The purpose of this bill is to clarify the tax collection responsibilities of horse-boarding businesses 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 horse boarding and other related services typically provided to horses under board. This failure has created confusion within the horse-boarding community and resulted in uncertainty regarding the tax obligations of certain taxpayers. Recent audits undertaken by the Division of Taxation have exacerbated the issue and resulted in the closure of some horse-boarding businesses that have been assessed taxes, penalties, and interest for sales and charges that, in some instances, date back to the fall of 2006. The failure to provide clear and consistent guidance also has placed New Jersey horse-boarding businesses at a competitive disadvantage with similar businesses in surrounding states. In states like Pennsylvania, the law is clear that businesses are not required to charge and collect sales tax on charges for boarding horses. By providing an exemption for horse boarding and related services, this bill eliminates the confusion and provides clarity to the tax obligations of New Jersey businesses. Additionally, by providing an exemption the bill levels the playing field for horse-boarding businesses within this State and their out-of-State counterparts.

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Christopher Bateman (R)*, 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 10/13/2016)