Breeders of Horses Upset About Tax Assessments

An attempt by Ventura County to collect taxes on the value of show and breeding horses has prompted protests from scores of ranch owners, many of whom have refused the county’s request for information about their animals.

The horse breeders are upset about high assessments--some in the millions of dollars--of their horses, according to Patricia Caldwell, owner of Oasis Ranch, which is several miles west of Moorpark.

The dispute led to a two-hour meeting Thursday between representatives of the horse breeders and County Assessor Jack Waterman. The meeting produced at least a momentary truce.

Participants said Waterman agreed to begin the assessment process over again and waive late-filing penalties against the ranchers; the breeders agreed to assist in determining the value of their animals.

But Caldwell said many horse breeders remain unhappy with the new business expense. She said she received a $1.6-million assessment and a tax bill of about $24,000.

‘Different Than Taxing a Desk’

“Even if I get the tax to a realistic level,” Caldwell said, “taxing a horse is different than taxing a desk in an office. Desks do not eat and desks do not generate veterinarian bills.”

The levy at issue is the county’s business property tax applied to the horse business.

In Ventura County, as elsewhere, assessors mail tax notices to all businesses, asking them to estimate the value of their property. That figure, or a modified one set by the assessors, is used to compute the tax. The problem stems from the fact that assessors often rely on business licenses to learn of the enterprises they should be taxing, Waterman said.

For years, he said, horse breeders have escaped the notice of the assessor because they are in mostly unincorporated areas, where a business license is not required.

“We didn’t know they existed,” Waterman said, adding that his staff is too small to search for untaxed businesses.

Complaints From Taxpayers

Last year, however, Waterman’s office received complaints from taxpayers that several breeders of Arabian and other horses were not paying the business taxes. An investigation ensued, leading to the discovery that there were scores of ranches, Waterman said.

Waterman said his office mailed about 200 forms asking ranch owners to declare the value of their horses for taxation purposes.

Pete Peters, owner of Peters Arabians in Moorpark, said the forms asked for the pedigree of his horses and a list of customers who boarded at his ranch. “That didn’t fit me right,” he said.

Caldwell, a past president of the Conejo Valley Arabian Horse Breeders Assn., said she and many other ranchers threw the forms away because they believed the tax did not apply to them--or because they did not like the county’s request.

Waterman said that, in response to the 200 forms, 60 people declared that their horses were pets or race horses, which are not taxable. Of the others receiving forms, about 25% returned them, contrasted with a 95% return rate for other types of businesses, he said.

Inaccurate Evaluation

Having no information from those horse breeders, the assessor’s office determined the number and value of their stock by reviewing sale prices and pedigrees in trade journals and other sources, Waterman said.

Caldwell said that horse breeders believe the method of evaluating horses was inaccurate. A horse’s worth can be determined by many factors--such as the horse’s health, age, beauty--that were not considered, she said.

“In the Arabian horse industry, despite athletic ability, an ugly face won’t sell,” said T. Randolph Catanese, an attorney who represents three horse breeders in Ventura County.

Waterman said statutory deadlines made it impossible to get more information, especially without help from ranchers.

“It may not have been correct,” he said of the assessment method. “Valuing a horse is a difficult job. . . . We need help from the taxpayer. He knows more about his property than we do.”

Simplified Instructions

Waterman said that, in the wake of Thursday’s meeting, simplied instructions will be mailed to breeders.

Many of the ranches are in the hills surrounding Moorpark, near orange, lemon, avocado, apricot and other orchards. They have names such as Bonne-Fyre Farms, Kaleidoscope Arabians and Granpre Arabians.

Many are small operations, selling horses for as little as $75, Caldwell said. But there are also huge syndicate farms, where investors buy shares of specific horses that can be worth $500,000 or more, she said.

Caldwell said some breeders are considering seeking a change of the state law to get tax relief.

But Waterman promised that, until such a change, horse breeders will no longer be overlooked by the tax man.

“I want to cooperate,” he said. “But I don’t want them to get away without paying their fair share of taxes that everyone else is paying.”