Horses have been off and running in Pennsylvania for years and the industry got a boost when casino gaming was legalized.
So did the number of the beautiful, four-legged athletes in the commonwealth.
But racing insiders say that boom could go bust.
“State’s that surround us, a lot of those, don’t have sales taxes,” said Todd Mostoller, Executive Director of the Pennsylvania Horsemen’s Benevolent and Protective Association.
Mostoller is worried about a proposal by Governor Tom Wolf to saddle the sale of racehorses with a 6.6 percent sales tax.
“We have horses up for sale in claiming races,” said Mostoller. “Those horses can be claimed (sold) numerous times in one year. To have the same tax on the same revenue-producing asset is not in the best interest of the industry.”
Mostoller says thoroughbreds can quickly run right out of the commonwealth.
“You can throw a horse on a van and transport that horse in a very short distance, a couple hours away, and you don’t have that sales tax on those horses.”
But supporters of the Wolf plan say it’s only fair that everybody pay the sales tax, no exemptions.
“Every group that I know of will say, ‘you can’t tax me,’ because they think they’re special,” said Senator Lisa Boscola (D-Northampton/Lehigh) “Well, if we’re gonna reduce property taxes, the whole combination of what we’re trying to do to expand the sales tax everybody’s gotta be part of it or it doesn’t work. You can’t just exclude groups.”
Of course, Midstaters will watch American Pharoah’s run for the Triple Crown this week from Belmont and think horse owners should be taxed because they can afford it. Mostoller says that’s not reality, especially at PA’s local tracks.
“We have a saying that 95 percent of all owners that own thoroughbred horses lose money. It’s unfortunate that all the public sees is the Breeder’s Cup or Kentucky Derby and those owners are independently wealthy. That’s not reality for most racing jurisdictions.”
Wolf’s budget estimates that taxing the sale of race horses would generate $3 million a year.