Breeder Wins Lawsuit on Racehorse Tax Assessment

In a case followed statewide for its possible effect on the horse-breeding industry, a Ventura Superior Court judge has ruled in favor of a breeder from Lake Sherwood in a high-stakes dispute with the Ventura County tax assessor over the definition of a racehorse.

The decision Monday by Judge Edwin M. Osborne entitles developer David H. Murdock to a refund of about $115,000 in back taxes and interest for the 1986 tax year 1986-87. Challenges for other tax years back to 1981 could bring Murdock’s total refund to $500,000 or more, said Ventura County Assessor Jerry Sanford.

But Sanford said Tuesday he would appeal the ruling.

Murdock was not available for comment. His attorney, Richard Craigo, hailed the ruling as good news for all racehorse breeders.

At issue were conflicting interpretations of a 1971 state law that gives tax breaks to owners of five racing breeds, including the blue-ribbon Arabians bred at Murdock’s Ventura Farms.

Usually, horses are taxed at 1% of their market value, the same as boats, planes and other personal property. But under a law aimed at boosting the state’s horse-racing industry, racehorses qualify for lower taxes, with a ceiling of $1,000 a head.

In Murdock’s case, the county argued that some of his 200 Arabians were ineligible for the tax break, because the animals were never entered in races, trained for races or registered with the state as racehorses.

Murdock successfully contended, however, that a horse should be classified as a racer if it is merely eligible to race or produces a foal eligible to race.