Horse boarding operators dodge big tax bullet

For the Backcountry Horsemen of Washington

The state seems to always be looking for new and creative ways to separate citizens from their hard-earned money. Last fall, horse boarding operations nearly lost a long-time tax exemption.

Since 1971, a rule has been on the books that centered on the definition of commercial agriculture purposes. The Washington Administrative Code (WAC) 458-30-200 requires that an owner’s land must be used for the feeding, breeding, managing and selling of livestock to be eligible for a tax exemption. Horse boarding operations across the state had been receiving this tax exemption since its inception nearly 38 years ago.

Last fall, the state Department of Revenue interpreted the rule to mean that an owner must be engaged simultaneously in all four activities to be eligible for the tax exemption. Not only was DOR looking into collecting future taxes from horse boarders for this now-closed exemption, it was also considering the possibility of collecting tens of thousands of dollars in back taxes.

I received an e-mail in November from a Sedro-Woolley resident involved in these operations. She wrote, “Please know that the equine industry is a very large industry. It affects an untold number of industries indirectly related to it. Any economic factors could impact positions of employment, clothing, tack, equipment, feed, boarding, and so forth.”

She made a good point. Imagine the devastation of back tax collections to horse boarding operations struggling in this uncertain economy.

When citizens began expressing concerns about this rule interpretation, several legislators got involved. To its credit, DOR decided not to enforce collection of the fees. However, legislative action was needed to prevent future collection of current and back taxes.

As a result, I co-sponsored House Bill 1232. As originally written, the measure would have defined commercial agricultural purposes “to include current farming practices and activities related to the raising, harvesting, feeding, breeding, managing, selling, care, or training of a farm product.” This also would have included other commercial livestock operations, in addition to horse boarding.

The bill received a hearing and passed the House Agriculture and Natural Resources Committee. It was referred to the House Finance Committee where it died.

Fortunately, a second measure, not as broadly written, moved forward. House Bill 1733 extends property tax exemptions to equestrian activities only, and excuses others from back taxes who thought they were under the open space tax exemption. The measure was signed by the governor and becomes effective July 26.

I commend those citizens who came forward and brought this issue to light. As a result, we were able to put the brakes on the back collection of what could have been a devastating tax bill.

Other help provided this session to the agriculture industry includes:

Senate Bill 5120 – Reduces permitting fees on farm structures;

Senate Bill 5583 – Provides protection from relinquishment of groundwater rights;

Senate Bill 5562 – Provides the same protections as the state’s “Right to Farm” laws for growing and harvesting of timber.

If you have an issue involving state government or would like more information about these bills, contact my Olympia office at (360) 786-7967.

EDITOR’S NOTE: State Rep. Dan Kristiansen, R-Snohomish, represents the 39th Legislative District, and also serves as chairman of the Washington House Republican Caucus. He can be contacted at (360) 786-7967 or from his Web site at:

State Representative Dan Kristiansen, 39th Legislative District
426A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7967 | Toll-free: (800) 562-6000