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Tax collector targeting animal sellers

BY JAMES BURGER, Californian staff writer
jburger@bakersfield.com | Sunday, Aug 16 2009 06:00 PM

Last Updated Sunday, Aug 16 2009 06:00 PM

Billy Stamper has three English Bulldog puppies for sale at $2,000 a piece.

If he sells all three to different buyers, he will owe the state of California about $495 in sales taxes. If he sells only two, he will owe nothing.

Stamper had no idea there was a tax on pet sales.

There is.

"If you make more than two sales in a 12-month period, you are considered a seller and you need a permit," said Anita Gore, deputy director of external affairs for the California Board of Equalization.

A sale is one transaction between the seller and a single buyer -- and can involve multiple animals, Gore said.

The BOE estimates that $14 million in sales tax goes uncollected from animal sales each year.

In the past year, the BOE has launched an aggressive campaign to let people know when they owe sales tax and how to pay it.

Board staffers search Internet sites, newspaper classified ads and other publications to identify people who might be selling pets in violation of BOE regulations.

Then their most common enforcement tools are a stamp and envelope.

"Letter writing campaigns are very successful for us," she said. "When people become aware of the law, they generally comply."

UNFAIR?

Stamper said now that he is aware of the rule, he will find out how to comply and decide whether to sell that third puppy.

He's not happy with the idea of losing the tax money. He has spayed his female bulldog and doesn't plan to breed again.

"This was a one-time thing," he said. "I can see them (taxing) the people who have puppy mills. To me I don't think it's fair."

Other breeders agree with Stamper that the tax is unfair.

But unlike him, some people are very, very aware of the tax and choose not to pay.

One Kern County breeder, who would not give her name for this story, said she will not pay taxes when she sells her parti-color Yorkshire Terriers.

She's an accountant and is very aware of the law, having worked for the county auditor's office.

She feels the tax is unfair.

"Should I pay it? Probably. Am I going to pay it? No," the breeder said. "I feel like I'm paying enough taxes. I'm being taxed to death. I don't want my sales tax money going to the state so a bunch of people can sit on their butt and not work."

She said she and her mother have 70 dogs they breed and she recently advertised three females for between $1,500 and $3,000 each.

She would owe $371.25 in taxes on the sale of those three animals.

The breeder said she runs a clean, professional business but would not give her name because she doesn't want to pay the taxes or have her operation exposed to the scrutiny of Kern County Animal Control.

COME INTO THE OPEN

Janice Anderson, a member of the Kern County Animal Control Commission who runs a dog business and occasionally breeds Newfoundlands, agrees the tax is not fair and said the BOE is out of line for hunting down breeders to demand payment.

But she disagrees with the breeder's decision to hide from the BOE and refuse to pay the tax.

Right now the tax, Anderson said, "is the law. It needs to be upheld."

She said people need to come into the open, pay their taxes and fight the system.

"Rather than being a silent protester, she needs to make her voice known," Anderson said of the breeder.

Anderson got a letter from the BOE asking about her breeding practices.

"I shot it right back to them," she said. "I haven't had a litter in a couple years."

Gore said despite the frustrations of breeders, the agency is not playing "big brother" by using the Internet and other means of collecting taxes.

"As a revenue generating state agency, it's our duty to use every resource at our disposal to collect taxes," Gore said. "We are not interested in anything more than the legal tax."