‘Puppy-mill’ bill could boost tax collections-WEB ONLY

Legislation that would stiffen Indiana’s animal-cruelty laws and more closely regulate dog-breeding operations commonly known as puppy mills could produce millions of dollars in new tax revenue from unregistered breeders, according to the author of the bill.

House Bill 1468, which has broad support from animal-rights groups, could generate tax income from breeders that work on a cash basis and fail to report their income, said Rep. Linda Lawson (D-Hammond), who introduced the bill.

Just last month, Indiana State Police arrested two dog sellers in Cloverdale, about 40 miles southwest of Indianapolis, for allegedly failing to pay nearly $193,000 in back taxes.

The additional tax money could be used to support city animal shelters that rely on public funding, Lawson said. Puppies purchased from large breeders often carry inherited medical conditions initially unknown to the buyer and end up at animal shelters because care is too costly for their owners.

“Taxpayers are bearing the burden here,” Lawson said. “We’ve got puppy mills that are producing dogs at a rate that is absolutely amazing.”

The measure sailed through the House last month after several amendments were added. It was referred to the Senate Committee on Corrections, Criminal and Civil Matters and is awaiting a hearing. Time is of the essence, however, because bills must be heard by April 9 to advance out of committee.

Under the bill, commercial dog breeders would be required to register with the State Board of Animal Health and pay a registration fee of between $250 and $1,000, depending on how many dogs they have. Under the proposal, anyone who maintains adult female dogs that produce 10 or more litters per year would qualify as a commercial dog breeder.

The bill also establishes standards for care, transportation and living conditions for animals raised by commercial breeders. It also requires pet dealers to maintain certain records and strengthens numerous animal cruelty laws.

Establishing a registry would make it easier for the state to collect sales taxes from the breeders. The amount collected now is likely mere pennies to what Lawson thinks could be taken in.

The Indiana Department of Revenue collected $25,261 in retail sales tax from Hoosier dog breeders in 2008, up from just $3,575 in 2006. The figures could be deceiving, though, because breeders who groom pets or sell pet supplies may be paying taxes under those titles instead, department spokeswoman Stephanie McFarland said.

Still, there’s little doubt the state is missing out on additional revenue. How much, though, is anyone’s guess.

“The short answer is nobody knows,” said Bryan Corbin, spokesman for the Office of Indiana Attorney General. “People can speculate, but nobody knows.”

The office filed tax-evasion charges against the puppy mill operator in Cloverdale and received a permanent injunction preventing the owner from conducting business until the back taxes are paid.

Lack of government oversight has made Indiana an attractive place for dog sellers to do business. The number operating in the state likely is in the hundreds, said Anne Sterling, Indiana state director for the Humane Society of the United States.

It’s difficult to determine their true numbers because there is no central registry. And only those selling animals wholesale to pet stores must register with the United States Department of Agriculture, although many often operate illegally. Roughly 80 were registered in 2007 in Indiana, according to the Humane Society.

“That’s a small, small tip of the iceberg [in terms] of what’s happening in the state,” Sterling said.

The Raleigh, N.C.-based American Kennel Club is not supportive of the new legislation. The association agrees that kennels with “deplorable” conditions must never be tolerated, but it said the bill wouldn’t fix the problem of irresponsible dog breeders and would severely limit the rights of responsible ones.

Puppy mill owners typically house animals in overcrowded and filthy conditions with inadequate shelter and care. Dogs are often treated like livestock, kept in cages stacked in rows and never touch the ground. The dogs are more prone to carry hereditary health problems due to generations of inbreeding.

Sick puppies suffering from parvovirus, scabies or ringworm often are sold to unsuspecting consumers who eventually pay thousands of dollars in vet bills or unload their pets on local animal shelters.

Many of the puppies raised in puppy mills end up being sold for hundreds of dollars in mainstream pet stores such as Uncle Bill’s Pet Centers and Petland Inc., investigations have found.

Indianapolis Animal Care & Control euthanized about 60 percent of the 18,000-plus animals it received at the city shelter last year. Logan Harrison, counsel to the animal care and control division, said the shelter could cut those numbers if there was a decrease in irresponsible breeding.

If passed, he said, the bill “might be a good start to help prevent animals in the long run from ever entering the shelter’s doors.”