California Laws - Revenue and Taxation Code
DIVISION 1. PROPERTY TAXATION
PART 12. TAXATION OF RACEHORSES

PART 12. TAXATION OF RACEHORSES (6318)(1-click HTML)

CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS (5701-5720.6) (6319)(1-click HTML)

5701. The Legislature finds that subjecting racehorses to the general property tax has resulted in a serious lack of uniformity as between one county and another respecting the method used in arriving at an assessed value; that this has resulted in serious inequities between the owners of racehorses depending in part on the county wherein they are assessed; that a continuation of current assessment practices will result in a substantial decrease in the breeding, boarding, and training of racehorses for racing competition in California and that current assessment practices have caused racehorse owners to remove their horses from California to other major breeding states with the result that over a period of time if these assessment practices are continued, both the breeding and racing of racehorses in California will suffer in that the quality and quantity of racehorses will be reduced and impaired; that a severe loss of employment and taxes to breeding and racing will result, attendance at race meetings will decrease, and betting will be reduced with consequent substantial loss of revenue to California. It is the intent of the Legislature, in enacting this part, to establish a more equitable method of taxing racehorses and thereby provide incentives to owners of these horses to maintain their horses within the state by providing for a uniform system of in-lieu taxation for the racehorses subject to the provisions of this part. The Legislature further finds that, because Arabian horses begin racing and breeding at least one year later than other breeds, Arabian horses should be treated equitably by allowing that breed four years before they are required to begin racing or be engaged in breeding activities. (6320)

5702. Except where the context otherwise requires, the definitions given in this chapter govern the construction of this part. (6321)

5703. "Racehorse" means each live horse, including a stallion, mare, gelding, ridgeling, colt, filly, or foal, that is or will be eligible to participate in or produce foals which will be eligible to participate in a horseracing contest in California wherein parimutuel racing is permitted under rules and regulations prescribed by the California Horse Racing Board. "Racehorse" does not mean or include any horse over three years old, or four years old in the case of an Arabian horse, that has not participated in a horserace contest on which parimutuel wagering is permitted or has not been used for breeding purposes in order to produce racehorses during the two previous calendar years. (6322)

5704. "Owner" means the owner of a racehorse or his agent. Any other person claiming, possessing or controlling a racehorse shall provide the name and address of the owner thereof or his agent upon the request of the assessor. (6323)

5705. "Annual tax" means a tax that is imposed on the owner for any racehorse domiciled in the State of California. (6324)

5706. "Current calendar year" means the yearly period from the first day of January to the last day of December, inclusive for which the tax is imposed. (6325)

5707. "Previous calendar year" means the calendar year immediately preceding the calendar year for which the annual tax is imposed. (6326)

5710. "Stallion" means any racehorse which, during the two previous calendar years, has serviced three or more different broodmares for the purpose of producing a racehorse. (6327)

5711. "Producing broodmare" means a racehorse mare which, during the previous calendar year, has produced a live foal. (6328)

5712. "Nonproducing broodmare" means a racehorse mare which has not produced a live foal during the previous calendar year. (6329)

5713. "Stakes-winning broodmare" means a broodmare which has won at any time during her life a race with a purse to which owners of participating horses have contributed nomination, entry, or starting fees or a recognized stakes race in which all entrants raced by invitation. (6330)

5714. "Stakes-producing broodmare" means a broodmare which has produced at any time during her life a racehorse which has won a race with a purse to which owners of participating horses have contributed nomination, entry, or starting fees or a recognized stakes race in which all entrants raced by invitation. (6331)

5715. "Stakes yearling", "stakes two-year-old", or "stakes three-year-old" means a racehorse of the designated age which was foaled by a stakes-winning or stakes-producing broodmare. (6332)

5716. "Yearling" means a racehorse which was foaled during the previous calendar year. (6333)

5716.5. "Foal" means a racehorse which is foaled during the current calendar year. (6334)

5717. "Active racehorse" means a racehorse which has participated in a horseracing contest on which parimutuel wagering was permitted during the previous calendar year. (6335)

5718. "Nonactive racehorse" means any racehorse which has not participated in any horseracing contest on which parimutuel wagering was permitted during the previous calendar year, except a racehorse three years of age or younger. (6336)

5719. "Live foal" means a foal which has lived for a period of three days or more. (6337)

5720. "Stud fee" is the sum of money charged by a stallion owner for the mating of his stallion to a broodmare. (6338)

5720.5. "Stud fee classification" will be determined by the highest stud fee charged for the mating of a mare to a stallion during the previous calendar year. (6339)

5720.6. "Domicile" means: (6340)

(a) The home ranch on January 1 of the current calendar year of the owner of a racehorse or other place where the horse is quartered when not racing or in training to race. (6341)

(b) The residence on January 1 of the current calendar year of the owner of any racehorse that is not quartered at a home ranch or other location when not racing or in training to race. (6342)

CHAPTER 2. IMPOSITION OF TAX (5721-5722) (6343)(1-click HTML)

5721. For the 1973 calendar year and each calendar year thereafter, on the privilege of breeding, training, caring for or racing a racehorse in this state, there is hereby imposed an annual tax on owners of racehorses for such racehorses domiciled in this state, which shall be in lieu of any property tax on racehorses subject to taxation pursuant to this part. (6344)

5722. The annual tax is imposed on and shall be paid by the owner on the following basis: (6345)

Age Age (6346)

12 13 (6347)

and and (6348)

younger older (6349)

STALLIONS (6350)

Stud fee classification (6351)

$10,000 and up................... $1,000 $650 (6352)

7,500 and up..................... 750 500 (6353)

5,000 and up..................... 500 330 (6354)

3,000 and up..................... 300 200 (6355)

1,500 and up..................... 150 100 (6356)

1,000 and up..................... 100 65 (6357)

Less than 1,000.................. 75 50 (6358)

BROODMARES (6359)

Stakes-winning producing......... (6360)

broodmares....................... 75 50 (6361)

Stakes-producing broodmares...... 75 50 (6362)

Other producing broodmares....... 40 28 (6363)

Stakes-winning nonproducing...... (6364)

broodmares....................... 35 25 (6365)

Other nonproducing............... (6366)

broodmares....................... 20 12 (6367)

ACTIVE RACEHORSES (6368)

Racehorses which in the previous (6369)

calendar (6370)

year earned: (6371)

$100,000 or more................. 150 (6372)

Between 50,000 and 99,999........ 100 (6373)

Between 25,000 and 49,999........ 60 (6374)

Less than 25,000................. 40 (6375)

OTHER RACEHORSES (6376)

Stakes yearlings, stakes two- (6377)

year-olds, 35 (6378)

stakes three-year-olds........... (6379)

Other yearlings, two-year-olds, (6380)

three-year-olds, andnonactive 20 (6381)

racehorses....................... (6382)

CHAPTER 3. EXEMPTIONS (5741) (6383)(1-click HTML)

5741. Foals born to a racehorse mare during the current calendar year shall be exempt from the tax imposed by this part or by any other part of this code. (6384)

CHAPTER 4. COLLECTION (5761-5768) (6385)(1-click HTML)

5761. The tax imposed pursuant to this part shall be determined as of 12:01 a. m. January 1 of the calendar year for which it is imposed and shall be immediately due and payable to the tax collector of the county in which the racehorse is domiciled. (6386)

5762. The tax imposed by this part shall become delinquent at 5 p.m. on the 15th day of February of the calendar year for which it is imposed. (6387)

5763. A delinquent penalty of 6 percent shall attach at 5 p.m. on the day any tax imposed by this part becomes delinquent. An additional penalty of 1 percent shall attach to the tax on the first day of the first calendar month commencing after the tax becomes delinquent and on the first day of each calendar month thereafter, until the delinquent tax and penalties have been paid in full. (6388)

5764. If, in the opinion of the tax collector, the amount of tax required to be paid to the county pursuant to this part, or any portion thereof, will be jeopardized by delay, the tax collector shall thereupon make a determination of the tax or the amount of tax to be collected. The amount so determined shall be immediately due and payable. Such jeopardy determinations and the amount of tax found to be due thereunder may be collected by the tax collector by any legal means, including, but not limited to, the procedures established pursuant to Chapter 3.3 (commencing with Section 2851), Chapter 4 (commencing with Section 2901), Chapter 5 (commencing with Section 3002), and Chapter 6 (commencing with Section 3101) of Part 5 of this division. (6389)

5765. (a) The assessor may perform audits of the books and records of any owner of racehorses subject to the tax imposed by this part in the county to determine if the correct information has been reported and the proper amount of tax has been paid. (6390)

(b) In those cases wherein the board determines that an audit would have been required under Section 469 if the racehorses were subject to property taxation, rather than to the provisions of this part, the assessor shall perform such audits of the books and records of the owners of racehorses subject to the tax imposed by this part as the board by rules and regulations may prescribe. (6391)

5766. The tax described in this part may be imposed at any time within five years after the tax would have otherwise become due and the penalties shall date from the time described in Section 5763. (6392)

5767. If any person required by Section 5782 to file a report fails to file it by the time specified, the tax collector shall impose on the lawful amount of taxes due under this part, a penalty equal to 10 percent of the tax, and the penalties provided by Section 5763. If any person required to file the report required by Section 5782 files any false or fraudulent report with an intent to defeat or evade any tax due under this part, the tax collector shall impose on the lawful amount of tax due under this part, a penalty equal to 25 percent of the tax, and the penalties provided by Section 5763. (6393)

5768. Upon request of the assessor, an owner of racehorses of a type subject to the tax imposed by this part shall make available at his principal place of business, principal location or principal address in California or at any place mutually agreeable to the assessor and the owner, a true copy of business records relevant to the number and type of racehorses located in any county of the state during any taxable period and the number of days spent in each county during that period. Records referred to in this section shall be retained by the owner for a period of five years from the date any tax to which they relate becomes due. (6394)

CHAPTER 5. ADMINISTRATION (5781-5790) (6395)(1-click HTML)

5781. The State Board of Equalization shall make such reasonable rules and regulations and prepare such forms as are necessary to carry out the intent and purposes of this part. (6396)

5782. On forms provided through the office of the assessor, the owner of a racehorse either in person, through his representative or by mail, shall report the tax due. The reports required by this section may be filed with the tax collector of the county in which the racehorse had its domicile. The reports shall be filed on or before 5:00 p.m. on the day the tax due becomes delinquent. (6397)

5783. The auditor of the county in which a report is filed shall transfer any taxes paid pursuant to this part belonging to another county as shown on the report, together with a copy of the report, in order that the auditor of any county receiving transferred funds can allocate them in the manner provided for in Section 5790. (6398)

5790. All proceeds derived from the tax, interest, and penalties imposed by this part shall be allocated by the auditor as promptly as is feasible in the following manner: (6399)

(a) If the domicile of the racehorse was located within a city and any school district, the proceeds from such racehorse shall be distributed one-third to the city, one-third to the school district, and one-third to the county. (6400)

(b) If the domicile of the racehorse was located outside of any city but was located within one or more school districts, the proceeds from such racehorse shall be distributed one-half to the school district or districts and one-half to the county. (6401)

(c) If the domicile of the racehorse was located in both an elementary school district and a high school district, the proceeds allocable to school districts shall be divided equally between the elementary and high school districts to the exclusion of all other school districts. (6402)

The details of the method of allocation shall be supplied by the county auditor, and shall fairly carry out the purposes of this section. (6403)

  

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