Ohio’s Dept. of Taxation Catches Up to Puppy Mills

Holmes County ExposedHolmes County, Ohio, the notorious puppy mill capital of Ohio, is reporting a decrease in commercial dog breeders.

The county reports 412 kennels with a total of 8,737 dogs in 2009, down from 537 kennels with 9,809 dogs in 2008.  Of course, some may simply be operating illegally without licenses, but just maybe, there really are fewer kennels breeding dogs for profit.

In fact, 2008 was a banner year for the millers with an increase in mills in Holmes County from 485 in 2007.  Ervin Raber, the president of the puppy mill group euphemistically called Ohio Professional Dog Breeders Association, bragged that the mills in Holmes County alone had revenues of $9 million.

Dog breeding kennels were on the rise in Holmes County with nearly 10,000 dogs living in squalor by 2008. So what happened? Why the steep decline in numbers of kennels and dogs this year?

The answer may well be Ohio’s Department of Taxation. A cash-strapped state hit hard by the recession, Ohio officials wondered if those millers in Holmes and other Ohio counties were paying their fair share of taxes. They really wondered about this when they heard breeding dogs for sale brought revenues of $9 million to millers just in Holmes County.  

Under Ohio law, ORC §5739.01(B)(1) sales tax must be collected on "[a]ll transactions by which title or possession, or both, of tangible personal property, is or is to be transferred…" §5701.03(A) defines "personal property" to include "every tangible thing that is the subject of ownership, whether animate or inanimate…and that does not constitute real property". § 5739.01(YY) defines "tangible personal property" for purposes of the Ohio sales tax, as, "personal property that can be seen, weighed, measured, felt, or touch, or that is otherwise perceptible to the senses."

This means sales of dogs are generally subject to Ohio sales tax.

The Ohio Dept. of Taxation has been issuing reminders to dog breeding kennel operators in Holmes County and all other Ohio counties:

"We have been notified that you are doing business in the state of Ohio, as a breeder of domestic pets, and may not be collecting and submitting sales tax….Be aware, any individual in the business of breeding for the purpose of selling falls into the category of Animal Production. Accordingly, after an animal is bred for the purpose of selling, title or possession of tangible personal property is transferred. This constitutes an Ohio taxable sale. As a result you are required to register as a vendor, collect the proper amount of sales tax, timely file tax returns with payment of tax collected, and maintain complete records of transactions".

There are also federal, state and local income taxes. The IRS is investigating….

Curiously, under state law Holmes County could levy sales taxes. The Holmes County commissioners have supported puppy mills, even opposing state regulation that would help minimize pollution from improperly disposed of carcasses and animal waste and improve sanitation, fire prevention and treatment of animals, many of which are likely to end up in the public shelter, a burden on the taxpayers.

Yet, these same commissioners, too busy pandering to the millers, have done nothing to make sure the county gets tax revenues from these businesses that take in $9 million annually. Maybe the other citizens of Holmes County would appreciate it if the commissioners acted to benefit all of the citizens of the county by collecting tax revenues from these multi-million dollar a year businesses.

Does the prospect of paying taxes, even sales taxes, have the millers on the run in  Holmes County?  If so, you can thank http://www.holmescountyexposed.com/ with its more than 1,300 advocates who have alerted the state to the uncollected taxes.

Ohio is not the only state where sales and other taxes are going uncollected from commercial dog breeders. Indiana has announced it will begin collecting sales tax from puppy millers July 1. What about your state? Contact Animal Law Coalition for information about how your state can collect sales and other taxes from commercial companion animal breeders.      

6 thoughts on “Ohio’s Dept. of Taxation Catches Up to Puppy Mills”

  1. This is interesting because many of the puppy millers in ohio are selling their dogs to rescues. Will the rescues also be investigated? This could really open a pandora’s box for those who are trying to get these poor dogs out of the system.

  2. This has nothing to do with purchasers. (By the way, generally, buying dogs only supports the millers.) This is about collecting sales and other taxes from puppy millers and backyard breeders.

  3. I know many people believe that if you pay for the dogs freedom you are supporting the puppy millers. But I have friends who have rescued many dogs by paying small surrender fees to get them out of the system. If uncle sam decides to start checking the paper trails of these sales and confirming who is purchasing these dogs, this could be a problem for many rescues. It’s very much like the babysitter or housekeeper who gets paid under the table. If the government want to start investigating whether or not they pay taxes, eventually the trail could lead to the purchaser of these services.

  4. Lyn, it’s not the same thing at all. You are talking about employment vs sale of goods. An employee must pay income taxes and employers must pay SS and other payroll taxes on employees. A seller of goods is very different – it is the seller who must collect, pay and report sales taxes.

    Besides, you are willing to let millers stay in business tax free so that some rescues can keep buying their dogs? You would be underwriting puppy mills to to the tune of hundreds of thousands of dollars a year. This would enable them to stay in business. By collecting taxes, it will force many out of business which is the goal, yes?

  5. I understand that I am talking about employment versus sale of goods but I feel you’re missing the point. I’m not suggesting that puppy millers not pay their taxes so please don’t accuse me or anyone who is willing to pay a small surrender fee to help save these poor dogs from a life of misery of supporting puppy mills. That’s an insult to everyone who cares about dogs. My concern is that an investigation into these sellers requires the government to examine paper trails, which could possibly lead to these rescues being questioned by local, state and federal authorities.

  6. It’s not always a small “surrender fee”. It’s often a full purchase price. Just know that when someone buys a puppy mill dog, yes, they are saving that dog, but they are helping support the miller. That’s not an insult; that’s a fact. You may say it’s okay, that it’s not that much money and it is worth it. Others disagree with that and believe people should not buy puppy mill dogs and put money in the pocket of the miller.

    The point is that going after tax revenue can help shut down these mills. I can’t think of a rescue that wouldn’t be more than happy to help authorities do that and provide whatever information may be needed to identify millers for the authorities.

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