BILL NUMBER: S7907
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the tax law, in relation to sales tax on the sale of
race horses made through claiming races
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill would remove the exemption from sales tax the total value of a
racehorse purchased in a claiming race
 
SUMMARY OF PROVISIONS:
Section one amends subdivision (g) of section 1111 of the tax law
Section two provides for the effective date
 
JUSTIFICATION:
A claiming race is a type of horse race in which the horses are put up
for sale at a specified claiming price until shortly before the race.
New York charges sales tax on the initial purchase of a racehorse, but
dramatically limits the collection of sales tax of future resales of a
horse in the same calendar year - effectively subsidizing the "flipping"
of valuable racehorses in a short period of time. This is accomplished
by charging sales tax only on the portion of the purchase price that
exceeds the prior purchase price. Removing this partial exemption on
unoriginal ownership will return much-needed revenue to the state
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect on the first day of the sales tax quarterly
period

Statutes affected:
S7907: 1111 tax law