MHC Government Relations Committee Report
YOUR MARYLAND HORSE COUNCIL PUBLICATION Taxes and Horses
It’s that time of year when non-profits hope for end-of-year donations and taxpayers look for tax deductions. As a result, we put together this primer on the different kinds of non-profits most common in the horse industry. Whether an organization qualifies as a non-profit is a question of
federal tax law. Te section of the tax code that explains the various types of non-profits is 26 U.S.C. § 501. Tat is why you hear so many people referring to non-profits as “501s.”
Charities: Te most common type of non-profit in the horse indus-
try is the 501(c)(3) organization. 501(c)(3) status is generally available for any corporation that is “organized and operated exclusively for . . . charitable . . . or educational purposes,” or to “foster . . . amateur sports competitions,” or to “prevent cruelty to animals to children.” Charitable organizations do not have to pay federal income taxes and do not have to pay Maryland property taxes. Maryland charities are also ex- empt from paying sales tax, as long as the corporation has applied for and received a certificate of tax exemption from the Office of the Comptroller. Te major limitation on charities is that “no substantial part of the[ir] ac- tivities” can consist of “attempting to influence legislation . . . or interven[ing] in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” In plain English, this means that, generally speaking, charities must keep their lobbying expenditures under 20 percent of their total expenditures.
Trade Associations: Another type of non-profit common in the horse
world is the 501(c)(6) corporation, which includes “business leagues.” IRS explains that 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 defines “business leagues” to include trade associations. Te Maryland Horse Council is a trade association, and so this is the
chapter of the tax code under which we are organized. Te American Horse Council, the trade association for the national horse industry, is also a 501(c)(6). Trade associations can engage in an unlimited amount of lobbying
provided the lobbying furthers their tax-exempt purpose. For example, MHC can (and does) engage in unlimited lobbying on issues that affect the Maryland horse industry without jeopardizing its tax status.
Social Clubs: Te last type of non-profit common in the horse indus-
try is social clubs, which IRS defines as membership clubs organized for “pleasure” or “recreation.” Trail riding clubs, hunt clubs, polo clubs, and the like can qualify for 501(c)(7) status. Te only real limitation on social clubs is that “substantially all” of their activities must be for the pleasure or recreation of their members. We always recommend that you consult your financial adviser on any
issue relating to taxes. We also caution readers that not every charitable donation is tax deductible, and whether a donation is tax deductible or not depends on your individual financial situation.
join.mdhorsecouncil.org Now Accepting Show Team Boarders!
Stall & Field Boarding, Lessons, Camp.
Hunter Jumper Lessons & Sales. Indoor, Outdoor,
Trails, Show Teams. Deana Tice, Brittany Tice and Hailey Johnson
Harwood, MD • 410-798-4980
www.enticementstables.com
20 | NOVEMBER 2021 | THE EQUIERY YOUR MARYLAND HORSE COUNCIL PUBLICATION
Learn about other great benefi ts at
www.MDHorseCouncil.org
800-244-9580 |
www.equiery.com
www.equiery.com
Free Subscription &
Ad Specials with your
MHC Membership Join Today!
A MARYLAND HORSE COUNCIL PUBLICATION
0921
FREE
A MARYLAND HORSE COUNCIL PUBLICATION
SINCE 1990
FEBRUARY 2018
BEN’S CAT
“The People’s Horse” © Catie Sprankle Photography see page 3
PLUS!
2017 Yearbook of Champions & 2018 Activity Guide Maryland Horse Industry 2018 Overview
THE EQUIERY’S ANNUAL
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
