Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
210.0000 DEMONSTRATION, DISPLAY AND USE OF PROPERTY HELD FOR RESALE—General—Regulation 1669
210.0045 Brood Mares—When Use Occurs. The following are guidelines to determine if "use" is made of a brood mare held for resale.
(1) If a brood mare has two or more foals as a result of having been bred while owned by the person holding the mare for resale, the owner has made a taxable use of the horse as a brood mare since this is substantial evidence that the breeding was not a utilization either incidental or necessary to effect a sale.
(2) Generally, a taxable use will also be found if a brood mare, held for resale, has been capitalized and treated as a depreciable asset for federal and state income tax purposes.
(3) If a retailer of horses retains a brood mare for resale over two full years, regardless of whether it has ever foaled, the individual case would be suspect and presumed taxable.
(4) A mare having been bred in two successive breeding seasons or sold with a single foal at her side or sold while in foal and with a single foal at her side will not dictate a finding that there is a taxable use inconsistent with that of holding the brood mares for resale. 9/19/85.