A Royal Accident- a parade pony deserving the royal treatment

The hoopla of the Royal Wedding was this past weekend!

Unfortunately, this parade pony took a spill on the pavement when he was spooked- though reportedly he is doing fine. yikes!

Some groups are petitioning the courts for an end of using horses in cities.

For example, New York City has faced vigorous protests against the carriage-horse industry, claiming that horse welfare standards are not met.  Some say that the standards of care need to be enforced better (or for the implementation of improved standards), others say that horses do not belong in cities at all due to loud, harsh, and unnatural noise and pollution that spook horses and cause them other discomforts.
I haven't yet heard protests against the British Calvary due to this Royal accident, but such incidents often raise the debate once again.

As I posted earlier, I love watching the police horses in San Francisco, and think they can do a great amount of good that police in cars, on foot, or on bike cannot achieve; however, I also strongly advocate for the highest regard of care given to horses used in city service.  The city does create equine discomforts unlike a rural riding arena, but many of these discomforts can be counter-balanced by providing excellent care.
It is a public policy issue at this point, though increasingly some state courts have taken action (such as implementing bans on carriage-horses in Santa Fe, NM and Key West, FL).

(Could it be the same horse?! Me, with a mounted officer outside Buckingham Palace, June 2010)

(Calvary parading down the Mall to Buckingham palace, June 2010, on the Queen's Birthday)

While the debate rages on, I just hope this parade pony got a warm poultice with his oats scones and tea!

Cowboy Chaps to Business Suits: advancing the art of the sale

{Image Source: Cal Poly Rodeo 1953}

In October 2010 I wrote a post about Florida's new laws governing equine sale transactions (click here to read original post); I was surprised that California did not have a comparable statute- California had a much more limited involvement in sales.

~Enter January 2011~

California enacts  California Business and Professions Code Section 19525, bearing close affinity with the equine transaction laws in Florida and Kentucky, among others.
(perhaps the California Legislature reads my blog!)

So how does this affect you and your horses?

Here is an excerpt from the law:

(d) It is unlawful for a person to act as a "dual agent," which is
hereby defined as a person acting as an agent for both the purchaser
and the seller, in a transaction involving the sale, purchase, or
transfer of an interest in an equine without the prior knowledge of
both the purchaser and seller, and the written consent of both the
purchaser and seller.
(emphasis added)

This portion alone could make many horse sales technically illegal- do you always have your sale agreements in writing?  Do you ask if your agent is representing the other side?

However, there is an important limitation:
(a) For purposes of this section, "equine" means a horse of
any breed used for racing or showing, including prospective
racehorses, breeding prospects, stallions, stallion seasons,
broodmares, yearlings, or weanlings, or any interest therein.
 The statute is limited to horses participating in a particular enterprise, such as racing or breeding; these horses are typically used as business property.  The state has an interest in regulating fair business practices for a variety of reasons.

 I'm a little unclear on the far-reaching implications of this new statute; when laws are new it can be uncertain how a court would interpret it in a dispute.

For example, what does a horse used for "showing" mean for the purpose of this section?
Schooling shows? Rated shows? How often does a horse have to compete at a show each year to qualify?  Does the buyer or the seller have to intend for the horse to be used for showing?

Equine Attorney Paul Husband is going to discuss this statute via simulcast,
 and I've registered! Have you? It's free and open to the public! Click here to find the link to sign-up.

Date: 5/2/2011
Time: 7:00 pm Pacific Time 
Speaker: Paul Husband, Attorney at Law
Format: Simulcast - attend via your phone or computer

Finally, while statutes and laws often seem confusing and wordy, I encourage you as a responsible horse owner to know the law and your rights guaranteed by California.  And for non-Californians, I encourage you to attend the simulcast and read the statute: similar laws may be coming to a state near you.

Read the full text of the new law here
(Don't worry, it isn't very long!)

Whether you like this law is a personal choice and reflects your interpretation of policy; I'm undecided if this law goes far enough to protect the rights of all horsemen and women,
or, could it be that the state is intruding on affairs that we want to handle on our own?

Jockeying for Non-Profit Status by a Monopoly Business

Non-profit rules and regulations weave circuitously through our rather unwieldy tax code.  But one important non-profit theory is that tax exemption is considered a "tax subsidy" provided by the U.S. taxpayers, therefore the IRS carefully scrutinizes organizations that claim exemption under Section 501c.  

Many equine organizations seek non-profit status, including horse rescue organizations, educational programs, and youth riding groups (see here for the U.S. Pony Club's letter of determination of 501c3 status from the IRS).  

There are many different types of non-profits, 28 in fact!  Some of these include religious, charitable, scientific, literary, or prevention of abuse of children or animals.  There are different tax implications for each non-profit designation, but a shared characteristic is that a non-profit can operate to earn revenue, but that revenue cannot be distributed to or for the inurement of a private shareholder or individual.

In the case Jockey Club v U.S., (137 F.Supp. 419) an organization claimed tax-exempt status in 1956 as a business league that operated "to encourage the development of the thoroughbred horse and to establish racing on a footing commanding public confidence and interest."  And the court found that the Jockey Club indeed performed this purpose because:
 "Its Registration Department maintains and publishes the American Stud Book, in which breeders can learn the blood lines of every thoroughbred registered in the United States. Strict proof of eligibility to be registered in the Stud Book is required. More than 8,000 foals are now registered each year. The book is indispensable to the breeding and racing of thoroughbred horses in the United States."

The Jockey Club earned approximately $60,000 per year and claimed that the revenue was tax-exempt because it was a business league, which by IRS statute: "A business league is an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit." 
(IRS 1939 Section 101(7)).

It is the second part of the statute that the court found the Jockey Club could not meet.  It said of the Jockey Club's operations, "Each of these services is, by the tradition of the industry or even by law, essential to the individual who requests and pays for the services. They are comparable to a lawyer's certificate of title, or a doctor's certificate of health."  Because the Jockey Club entered into contracts with race tracks and other entities to receive compensation for services, it was operating like a regular business ordinarily carried on for-profit.


Lesson to be learned:
Qualifying for non-profit status can be a wonderful benefit to an organization satisfying a suitable public policy, however, an organization must be careful to adhere to the applicable laws, otherwise non-profit status can be lost. Furthermore, an organization may be required to pay back the tax deductions that had been wrongfully taken.
 If violating the tax laws was deliberate then even greater penalty will follow!

Moral of the story: 
Make sure your tax affairs are neat as a pin; see an equine attorney, tax attorney, or CPA when beginning a new equine business venture, and also as a regular check-up to ensure you have stayed in compliance with the ever ponderous tax code!

{All photos taken by Vassar Photography at my local track, Golden Gate Fields}

A horse is a horse of course of course... unless its a cow

Wanted to quickly share this quirky clip of a German bovine sharing aspirations of show jumping greatness with her fraulein owner!

While equine law certainly encompasses such equid deviations as a mule or donkey, could it also extend to a cow in such circumstances?!