Consideration of a bill to exempt the Kentucky equine industry from sales tax on veterinary drugs led to a much bigger committee discussion this week, including talk about tax reform.
The substitute bill before the Kentucky House Agriculture Committee sought tax relief to the tune of three and a half million dollars per year. Also filed this session is the horse industry’s annual request to exempt equine feed, fencing, and machinery from the sales tax.
Those exemptions already exist for other livestock farmers. Brownsville Representative Michael Meredith urged the committee to go for the broader tax break. “As an agriculture committee, I think we need to send a strong message to the horsemen all across the state of Kentucky, that we value them.”
The larger sales tax exemption carries an annual price tag of about 34 million dollars. Lexington Representative Kelly Flood said given the cuts proposed by the governor, the equine drug exemption is more practical. "And this is a moment to not go to bat on 30 million, when you know you won’t get any of it and come through for three million and stand by your word and make it happen.”
Committee member Sannie Overly says such a tax exemption could probably only happen with tax reform. Chauncey Morris with the Kentucky Thoroughbred Association echoed that sentiment. “This is a difficult budget time and we look forward to tax modernization.”
In the end, the Ag committee approved the entire sales tax exemption. It now goes to the House Budget Committee for review.
