May 23, 2006

Tax Tidbit: Dog Controversy in Iowa

What do dogs, the Humane Society, and the Iowa Federation of Animal Owners all have in common?

A storm is brewing in Iowa and it has nothing to do with residential property taxes or even tax cuts for the elderly. According to this article, the Iowa Federation of Animal Owners worked hard to pass a bill through the legislature that "would allow breeders and pet shops to classify dogs as farm products, making them eligible for a tax break on the supplies used to raise dogs." The Governor has until June 2 to decide if he wants to sign the bill.

Current law says that dog kennels have to levy a sales tax when they sell a dog and then also must pay "state sales tax on the feed, veterinary supplies, utilities and other items they buy to raise dogs. " This legislation would ensure that sale of these items would be tax exempt.

The Humane Society says that this legislation "sets a bad precedent of listing dogs and livestock in the same sentence."

Not an incredibly interesting debate unless of course you care really strongly one way or another - but it's just further proof that taxes permeate all aspects of our (and our pets) lives. Of course the real question is whether or not tax exemptions like this one really serve any purpose at all.

For a good look at the true cost of tax expenditures like this one - check out ITEP's policy brief on the subject here.


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