Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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110.0000 ANIMAL LIFE AND FEED—Regulation 1587

Annotation 110.0025


110.0025 Breeding Stock. Use tax presumptively applies to the purchase of breeding horses for the period in which the horses are entered on the books of the purchaser as capital assets and are physically used in California. The statute of limitations begins to run as of that period. The breeding of the horses will not ordinarily be seen as exempt demonstration and display after the horses are capitalized on the purchaser's records. If a horse purchased ex-tax has been capitalized and bred but is resold prior to the purchaser's obtaining any depreciation or capital gains benefits, consideration shall be given to any evidence submitted by the purchaser that the breeding of the horse was only for purposes of demonstration and display. 7/10/74.