Canine Blood Bank Wins in CA!
Hemopet recovered from a big challenge recently. Hemopet is a blood bank for dogs, set up as a 501(c)3 charitable organization. As such they aren't supposed to pay taxes right? Well, the California Franchise Tax Board thought differently, until a hearing last Wednesday April 20.In 1965 the State of California ruled by statute that blood banks should not be subject to any taxes. Furthermore, as these blood banks provide a service to society they are not subject to taxation. At that time, the type of blood bank was not specified as only blood banks for humans existed. Then, along comes the need for similar services for animals in the late 1980s and early 1990s and veterinary companion animal blood banks arose.
In early 1990, after Hemopet had opened the first non-profit canine blood bank, the California Board of Equalization (BOE) Franchise Tax Board stated that we need to pay personal property and other taxers. Upon our appeal of this ruling in early 1993, the government ruled that animal and human blood banks should be treated equally and be tax exempt. We then proceeded under that ruling without issues until 2010, when suddenly the BOE audited our facility for the prior 3 years and determined that we had a failure to pay sales and use tax of over $100,00 (including accrued interest) !
It turns out that the transcript of our 1993 Hearing before the BOE which would have revealed the details of the discussion is only kept for 12 years, and no longer existed. After two trips to Sacrament to discuss this situation with BOE Board members, they were understanding but indicated that there was no legal statute to exempt animal blood banks from taxation, and they would be willing to work with state legislators to help present a bill to clarify this legal loophole once and for all.
Enter Senate Bill SB898, which was heard before the CA Senate Governance & Finance Committee on April 20 in Sacramento. Present was our local Senator, Janet Nguyen, who authored it , myself, AHVMF Treasurer, Dr. Madeline Yamate and an executive representative from the California Veterinary Medical Association – all of us in support, of course ! Many letters of support had been sent upon urgent request from Senator Nguyen’s office in the last several days -- from organizations, individual veterinarians and the public, AND , including from the AHVMA !
The Committee voted unanimously 7-0 to pass the Bill on through the Senate for formal voting. It then goes to the CA Assembly, which has two authors ready to help with it. Hopefully, all will proceed smoothly and animal blood banks in our state will be exempt from taxation.
