Ohio Giving Commercial Dog Breeders a Pass on Taxes

Michael W. McKinney, Public Information Officer for the Ohio Department of Taxation, recently announced that the department has estimated that commercial dog breeders may owe the state as much as $550,000 annually in unpaid sales taxes.

McKinney says, however, that it is not worth trying to collect.

Kind of incredible when you consider that Ohio is facing a budget shortfall in the billions. Also, kind of incredible when you consider as Zaron van Meter, founder, SK9 Scottish Terrier Rescue and HolmesCountyExposed.com, points out, "This one half of a million dollars could have provided jobs for 10 badly need humane agents in Ohio at $50,000 a year with benefits". 

Indeed, there may be a lot more money owed the state from commercial dog breeding operations. There are approximately 10,000 known commercial dog breeding businesses in Ohio.  

Van Meter notes that at least five counties did not require commercial breeders to obtain kennel or vendor’s licenses as required by law. She challenged McKinney, "Without these licenses, how can your department track these breeders or dogs they have sold?" 

As another example, Van Meter said Tuscarawas County’s auditor told her no kennel or vendor’s licenses were required for "inactive" kennels which is not an exception under Ohio law. Even so, the auditor acknowledged at least one kennel in the county maintained 30 dogs. Not exactly "inactive".  Only 18 of the 184 known dog breeding kennels in Tuscarawas County have vendor’s licenses.

None of the 410 known dog breeding kennels in Holmes County with 11,033 dogs, including 41 with more than 50 breeding dogs each, have vendor’s licenses.

In Coshocton County only 11 of the 148  known dog breeding kennels, have vendor’s licenses. 

Also, the Dept. of Taxation typically grants an exemption from sales tax on dogs sold at auctions to other breeders that keep them for breeding. The Dept. also generally does not collect sales taxes from sales of dogs to wholesalers or brokers. Sales by wholesalers or brokers to retailers such as pet stores are also generally exempt. McKinney explains the exemptions of these sales from taxes are given because the dogs are used in "producing tangible personal property for sale by farming (which in Ohio includes dog breeding)…Breeding stock is considered to be used to produce tangible personal property (in this case, puppies) for sale and is exempt from sales tax."

In fact, unless commercial dog breeders sell directly to the public, they are not required to have vendor’s licenses.  As Van Meter pointed out, the Dept. of Taxation does not have a way to track licensed  – or unlicensed – commercial dog breeders to determine if they have vendor’s licenses and pay sales taxes. The Dept. does not even have a way to tell the public whether a commercial dog breeder has a vendor’s license. According to McKinney, the Dept. of Taxation relies on reports by the public to tell them whether a particular commercial dog breeder lacks a vendor’s license and is not paying sales tax as required.

Ervin L. Raber, President, Ohio Professional Dog Breeders Association, a notorious commercial dog breeder, told a legislative committee last year, ""In Holmes County alone this industry brings in over 9 million dollars a year, not to mention the surrounding counties and the rest of the state".

For a time it appeared the state may be enforcing sales tax requirements, forcing some commercial dog breeders or puppy mills, to shut down.

According to McKinney, now the Dept. of Taxation is giving commercial dog breeders, puppy mills, a pass in paying taxes.

Go here for more on a new bill introduced in Ohio, McKenzie’s Law, H.B. 570, that would mandate commercial dog breeders to obtain vendor’s licenses including even if they simply advertise dogs for sale, require cross agency reporting of kennel and vendor licensing, and also broaden and increase enforcement of licensing requirements.     

Go here for information about a citizens-backed, ballot initiative – Ohio Dog Auctions Act – that would make it illegal for anyone to auction or raffle a dog in Ohio. It also would prohibit bringing dogs into the state for sale or trade that were acquired by auction or raffle elsewhere.  As Mary O’Connor-Shaver, founder of the Coalition to Ban Ohio Dog Auctions, explains, "We need your help to end a major distribution channel serving buyers and sellers from 15 states, many of whom have repeated, long standing violations of the Animal Welfare Act and/or have been convicted of animal cruelty." 

For more on licensed commercial dog breeders in Ohio, visit http://www.holmescountyexposed.com/