Oklahoma is facing an estimated $1.5 billion budget deficit and one of the ways that Oklahoma Governor Mary Fallin wants to make up the shortfall is to levy a sales tax on horse sales in the Sooner State. The tax would be imposed on all horse sale transactions – both private and at public auction.
Equine industry representatives point out that imposing a sales tax of 8.357 percent would only raise $1.3 million for the state’s general fund, and that’s if current equine sales remain in the state. The unintended consequences might see equine events fleeing the state for friendlier territory and taking jobs and other economic benefits with them.
One such organization that currently holds several larges shows at the Oklahoma State Fairgrounds and an equine auction in the state is the National Reining Horse Association.
“Just a few miles from the Oklahoma State Capitol, NRHA hosts the largest reining horse sales in the world,” said NRHA Commissioner Gary Carpenter. “We host the sales to provide a reputable and well-managed avenue for both buyers and sellers, but we also host the sales to draw revenue to the association to fund a variety of programs. If our revenue is cut due to a tax, that will impact other areas of the association. We will be forced into looking for other competitive options because of that fiscal responsibility to our membership.”
Debbie Schauf, executive director of the Oklahoma Quarter Horse Racing Association, is a former representative in the Kansas legislature so she understands the tough spot that the Oklahoma lawmakers are in, but warns that a sales tax on an industry that brings many jobs and other benefits to the state could have unforeseen costs in lost revenue.
“The governor has proposed a number of revenue regenerating options. One of the revenue generating options that the governor is proposing is a sales tax on horses. Spokespeople for the governor’s office are quoted as saying horse ownership is a luxury. There still would not be a sales tax on any other form of livestock, but they were suggesting that they might have a sales tax on horses. And it wasn’t just horse sales – it’s a sales tax on horses.”
Schauf said rural legislators in the state do not support the sales tax on horses, but with such a large budget deficit, budget cuts and new revenue are vital to the state’s bottom line.
“The governor has not taken it out of her proposal to the legislature,” Schauf said. “You have to remember how the legislature works. The governor can propose things and she has the right to veto things, but she can’t draw a bill, run a bill or vote on a bill. She really has no say other than to suggest what she would like to see them do. She can then either sign or veto legislation once they pass it.