In 2021, the Texas Legislature passed SB 197, exempting animal rescue organizations from paying sales tax on adoption fees. Previously, only nonprofit animal welfare organizations operating out of physical facilities qualified for the sales tax exemption. Because this was confusing and unfair, THLN advocated updating the tax code so that home-based rescue and foster organizations did not have to bear this undue tax burden.
To be clear: rescue organizations don't sell animals for profit, and adoption fees comprise only a small part of their operating budgets. The majority of a rescue’s income comes from fundraising, and a legitimate rescue organization is in no way comparable to a pet retailer. Breeders and retailers that sell pets bred for profit typically sell those animals for hundreds or thousands of dollars. By contrast, volunteers who foster for rescues typically cover costs like pet food and supplies out of pocket. The Adoption Fee Sales Tax Exemption law points to the stark difference between “sales” and “adoptions” by eliminating the sales tax on activities that weren't commercial activities to begin with.
A victory for Texas rescue pets: Going forward, shelters and home-based rescues alike can use their tax savings to save more Texas pets. The Adoption Fee Sales Tax Exemption law took effect on October 1, 2021.
To download the THLN Fact Sheet for the Adoption Fee Sales Tax Exemption Law, go here.
About the Legislation
SB 197 Adoption Fee Sales Tax Exemption LawBill Caption: Relating to a sales and use tax exemption for animals adopted from or sold by nonprofit animal welfare organizations. Effective on: October 1, 2021 Companion Bill: HB 2510 Author and Coauthors: Nelson | Creighton | Kolkhorst | PaxtonSponsors: Noble | Meyer | Buckley | Turner, Chris | Rodriguez
Cosponsors: Button | Canales | Cook | Fierro | Goldman | Harless | Harris | Jetton | King, Phil | Krause | Meza | Minjarez | Morales Shaw | Neave | Ortega | Patterson | Perez | Price | Shaheen | Sherman, Sr. | Slaton | Slawson | Spiller | Swanson | Toth