By Erica L. Horn and Mark E. Holcomb
The equine industry has a long and esteemed history in the United States, with the first Thoroughbred races dating back to the early days of our nation. Thousands of people still gather each year at the Kentucky Derby, the Preakness Stakes, the Belmont Stakes and the Breeders’ Cup to watch some of the most exciting minutes in sports. In 2016, the pari-mutuel handle from horse racing in the United States exceeded $10.7 billion. Nearly 38,000 horse races were held that year in the United States alone.
Not surprisingly, individuals and businesses in the industry regularly buy and sell horses for racing, breeding, and other purposes. The application of sales and use tax statutes and exemptions vary from state to state, and it is important to have an understanding of the applicable laws to take advantage of valuable opportunities for tax planning. This article discusses how sales and use taxes apply to the equine industry in Kentucky and Florida.