07/26/2001 11:00PM

Incentive for breeders may soon be law

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DEL MAR, Calif. - Legislation that would eliminate the sales tax on Thoroughbred breeding stock purchased for use in California has passed the Assembly and Senate and will be sent to Gov. Gray Davis in coming days.

The legislation is one of two major racing-related bills that have passed the legislature. A bill allowing telephone betting has been approved but has not reached the governor's desk.

Of the two bills, the one eliminating sales tax is least likely to be opposed by Davis, who last year vetoed a bill permitting telephone betting.

"We're confident that he'll sign it," said Doug Burge, the executive vice president of the California Thoroughbred Breeders Association. "What this really promotes is buying and selling racing and breeding stock. Hopefully, people will buy a good mare or bring a stallion in from Kentucky."

The sales tax bill would eliminate the state portion of the tax that horse owners pay when they purchase breeding stock. The bill has an urgency clause that will put it into effect if signed.

Burge said the bill will put California breeders "on a level playing field" with breeders from other states. Currently, California breeders must pay an 8 percent sales tax on breeding purchases that stay in the state. Buyers from out of state can be exempted from that tax if they declare that the horses are being shipped out of state.

Even if the bill passes, state breeders will not be entirely off the tax hook. California breeders will still pay city and county taxes, which will amount to approximately 2 percent of the total price.

Language in the bill does not include sales tax exemptions for yearlings or horses of racing age, but does declare that horses of any age purchased for breeding purposes will not be subject to the tax. In other words, a 3-year-old filly purchased as a broodmare prospect will not be subject to the tax even if she capable of racing. Originally, the legislation pertained only to Thoroughbreds, but subsequent amendments included other breeds.

Budroyale could move up on money list

The presence of Budroyale in Sunday's $250,000 San Diego Handicap at Del Mar could lead to a change on the all-time list of California-bred money earnings.

Going into Sunday's race, Budroyale is ranked seventh with earnings of $2,813,810.

The San Diego has drawn an outstanding field, including Captain Steve, the winner of the Dubai World Cup; Skimming, the defending champion; and Futural, who finished first in the Hollywood Gold Cup, but was disqualified and placed third for interference in the stretch.

The 8-year-old Budroyale will be a longshot. He has not started since finishing seventh in the 2000 Pimlico Special 14 months ago, but a win would move him into sixth place on the all-time list.

The winner's share of $150,000 would put him past General Challenge, but leave Budroyale well short of Best Pal, who tops the list with $5,668,245. A win would also put him within $215,000 of Free House ($3,178,971), who is fifth.

Budroyale and Tiznow, the 2000 Horse of the Year who is second on the list, are the only members of the top 10 in training.

General Challenge, who won the 2000 Santa Anita Handicap, was in training with Bob Baffert during the summer, but went to the sidelines with an injury a few weeks ago. He has not started in 11 months and faces an uncertain future.

Tiznow, who has not started since winning the Santa Anita Handicap last March, has earned $4,244,830. He could challenge Best Pal on the all-time list if he recovers from recent back and muscle problems in time for a late summer and fall campaign.