Only three states tax veterinary services, but other states might consider doing so
Posted Feb. 15, 2009
The government of California could start taxing veterinary services as part of attempts to resolve the state's financial troubles, though the California VMA has mounted strong opposition to the move.
In November 2008, Republican Gov. Arnold Schwarzenegger issued his proposal for a solution to the state's current budget shortfall. On Dec. 31, he issued his proposal for a budget for the upcoming 2009-2010 fiscal year, which starts in July. Both proposals include provisions to raise the base sales tax to 8.75 percent and apply the tax to veterinary services for the first time—along with appliance and furniture repair, vehicle repair, and golf.
At press time in early February, the California legislature was still in special session trying to agree on a stopgap financial plan before the state ran out of funds. The governor had vetoed a short-term plan from Democratic lawmakers, who hold the majority in both the Senate and Assembly. That plan would not include a tax on veterinary services.
The AVMA State Legislative and Regulatory Affairs Department reported that only three states—Hawaii, New Mexico, and South Dakota—currently collect taxes on veterinary services. The AVMA's state policy analysts noted, however, that other states with budget shortfalls might follow California's lead.
"We are concerned that the governor's proposal puts veterinary medical care in the same category as furniture repair and golf. Further, this tax would be discriminatory in that it singles out only one healing arts profession. Does this administration consider the health and welfare of our companion and food animals a luxury item that animal owners should consider delaying until better times when they can afford the tax?"
—DR. WILLIAM A. GRANT II, PRESIDENT, CALIFORNIA VMA
"Given today's economic conditions, this tax couldn't come at a worse time," said Adrian Hochstadt, JD, the assistant director for state legislative and regulatory affairs at the AVMA. "It will especially burden people of modest means who are trying to keep their pets when they are having a hard time making ends meet."
The California VMA has organized a campaign opposing Gov. Schwarzenegger's plan to tax veterinary services.
"We are concerned that the governor's proposal puts veterinary medical care in the same category as furniture repair and golf," said Dr. William A. Grant II, CVMA president, in a press release. "Further, this tax would be discriminatory in that it singles out only one healing arts profession. Does this administration consider the health and welfare of our companion and food animals a luxury item that animal owners should consider delaying until better times when they can afford the tax?"
The CVMA stated that taxing veterinary care could be a hardship for pet owners, some of whom are facing home foreclosures or job losses. Taxing care for food animals could contribute to rising food prices, according to the association. The CVMA noted that affordable veterinary care helps protect public health.
The CVMA wrote a letter to the governor opposing the tax on veterinary services. The association urged its membership of more than 6,000 veterinarians to plead their case to the governor and state lawmakers—and to ask clients to do the same. The association also testified about the tax before a new Subcommittee on Revenues and the Economy within the state Senate Budget and Fiscal Review Committee.
Valerie Fenstermaker, CVMA executive director, said members of the governor's office received so many calls relevant to the tax on veterinary services by late January that they created a phone poll to track opposition and support.
"We've bombarded them with phone calls," Fenstermaker said. "It seems like we've got their attention."
Fenstermaker added that the CVMA has kept up the pressure on state lawmakers throughout the legislature's special sessions and will continue the campaign as long as the tax is on the table for the 2009-2010 state budget. The deadline for the next budget is June 15, though the legislature did not pass the 2008-2009 budget until September 2008.
Additional information about the California VMA campaign opposing a state tax on veterinary services is here