- LTR Blog
- About LTRThis is the History page.
- Contact UsThis is the Contact Us page.
The following is from the American Horse Council:
May 22, 2020
Special COVID-19 Issue
Copyright © 2020 American Horse Council
The AHC News is provided to you as a benefit of your AHC membership, and we hope you find the articles informative and useful. While the AHC does grant permission for newsletter articles to be passed on, we hope you will encourage those you are sharing the articles and information with to join the AHC so they can stay informed and up-to-date!
Permission to pass on the AHC News articles to your members, readers, or others is granted on the condition that it is forwarded in its original form or directly linked with the AHC logo and a link to the AHC website.
Don’t forget to read all the way to the bottom of the newsletter as there’s some great stuff down there.
Survey COVID-19 Economic Impact on Equine Industry
The American Horse Council is conducting a brief survey (14 questions which take less than 10 minutes) to determine the economic impacts of COVID-19 on the equine industry. We would very much appreciate your assistance with collecting this information. The only thing you need to have handy is your total horse related income and expenses for March 2019 and March 2020 so we have some comparison.
It’s important to note that for statistical reasons we are sending this survey to a predetermined 1,000 people. Please do NOT forward this or share this survey with others as statisticians will be scaling the responses and we must preserve the sample size .This survey will close May 30, 2020, and depending on the pandemic’s length we will reissue to get up to date numbers and data.
Thank you. Be well and Be Safe. #HorseStrong
Resources for Horse Owners
Horse Industry, Outdoor Groups Endorse “Great American Outdoors Act of 2020”
On May 6, 2020, the American Horse Council, American Sportfishing Association, American Trails and more than 25 other members of the Outdoor Recreation Roundtable (ORR) sent a letter to Congress urging lawmakers to pass the “Great American Outdoors Act” (S. 3422). The bill would not only promote outdoor activities as states begin to ease social distancing requirements, but it would also achieve key horse industry objectives such as fully funding the Land and Water Conservation Fund (LWCF). S. 3422 will fully fund LWCF by investing $900 million per year for public lands, parks and trails. Serving as a “recreational package” discussed by Senate staff with members of the horse industry earlier this year, the bill would also address the nation’s public lands maintenance backlog. Reducing the backlog in trails maintenance projects is a goal industry has fought for within the context of the “Restore Our Parks Act” (ROPA), among other vehicles. During the past year, members of the horse industry have submitted more than 200 letters to lawmakers urging passage of individual trails bills. The bill will also help to bolster recreation-focused business, including riding barns, as Americans seek to spend time outdoors during the months ahead.
S. 3422 is timely and will help expedite a transition to more flexible social distancing practices, including the re-opening of access to the nation’s trails. The National Park Service (NPS) is adopting a phased approach to open trails in the nation’s 62 national parks, consistent with the “Opening Up America Again Guidelines” released by the Administration on April 16. In a statement from the Department of Interior (DOI), Secretary Bernhardt affirmed the agency’s plan to work with governors and assess the circumstances of each state, thereby initiating a “park by park” approach to reopening access. During the week of May 9, for example, DOI announced the reopening of 16 national parks, including the Blue Ridge Parkway of North Carolina, the Grand Canyon, and the Curecanti National Recreation Area of Colorado, to name a few. To view a list of parks included in the recent, large-scale opening, please see the following link: https://www.doi.gov/pressreleases/case-you-missed-it-interior-continues-safely-restore-access-public-lands . For an “A to Z” list of national parks that have re-opened, or are in the process of easing restrictions to access, please visit the following web site: https://www.nationalparkstraveler.org/2020/05/reopening-national-park-system-whats-open.
Submitted by: Bryan Brendle, Director of Policy & Legislative Affairs
Resources for Small Businesses
SBA, Congress Roll Out Paycheck Protection Tools, Proposed Changes
While Congress debates next steps related to stimulus bills, the Administration continues to release guidance and other tools to clarify the Paycheck Protection Program’s (PPP) implementation, especially its signature “loan forgiveness” provision. On May 15, SBA released the PPP Loan Forgiveness Application, including instructions for its completion, a “Schedule A” and related worksheet.
According to SBA, the 11-page form includes “several measures to reduce compliance burdens and simplify the process for borrowers.” These include options for businesses “to calculate payroll costs using an alternative payroll covered period that aligns with borrowers’ regular payroll cycles” and “flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period,” among other measures. Importantly, the new form addresses some of the feedback from members of the horse industry, including “step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.”
Because the “covered period” for Paycheck Protection loans begins on the date that the bank actually disburses a loan to the borrower, it’s important to track various expenses during the window outlined by the CARES Act. To view a copy of the 11-page application and instructions, please click here: https://www.sba.gov/document/sba-form–paycheck-protection-program-loan-forgiveness-application .
Despite a congressional impasse over so-called Phase Four legislation to address the coronavirus, House and Senate lawmakers are rolling out their own bipartisan flexibility measures focusing on narrow fixes to the PPP. The House will vote next week on the “Paycheck Protection Flexibility Act” (H.R. 6886), introduced by Reps. Dean Phillips (D-MN) and Chip Roy (R-TX) on May 11. Highlights include the following provisions, which in part reflect feedback from members of the horse industry who are navigating the program:
- Eliminating a provision requiring 75 percent of proceeds to cover payroll expenses as a pre-condition for loan forgiveness;
- Allowing employers to participate in payroll tax deferment and the PPP;
- Extending re-hire deadlines beyond June 30;
- And extending the “cover period” beyond the current eight-week timeframe, more accurately reflecting the time expected for consumer demand to gain traction and drive revenue.
To view a copy of a statement related to H.R. 6886, please see the following:
https://roy.house.gov/media/press-releases/reps-chip-roy-and-dean-phillips-release-paycheck-protection-flexibility-act . On the other side of the Capitol, Senators Rubio (R-FL), Cardin (D-MD), Collins (R-ME) and Shaheen (D-NH) have offered the “Paycheck Protection Program Extension Act.” This narrow bill would also provide flexibility, including extension of the loan application filing deadline from June 30, 2020 to December 31, 2020 and extension of the cover period from eight to 16 weeks of expenses.
Submitted by: Bryan Brendle, Director of Policy & Legislative Affairs
Resources for Non-Profits
Nonprofits in the Time of COVID-19
While every sector of our economy and our lives has been significantly impacted by the COVID-19 pandemic, the nonprofit sector has taken an especially hard hit. This includes the horse industry. From breed and discipline associations to rescues and equine-assisted therapy centers, income is down, while expenses are not.
In many respects, our national breed and discipline organizations are part of the foundation of the horse world. At their core, they maintain the purity of our breeds and set the rules and standards for competition. While you might never own a purebred horse, remember that breed standards typically include conformation, helping ensure that there’s a genetic pool of strong, athletic animals for future generations. The rules they establish for competition gives everyone guidelines to follow, right down to the local level. Sure, you might not agree with everything they do, but these organizations lay the foundation upon which we all build.
What can organizations in this sector do? Ask people to renew their memberships, even if they don’t “need” it this year because they don’t plan to compete. Remind them to register their foals, and transfer registrations for horses they’ve bought or sold. Many organizations have magazines that typically rely on competitions to generate advertising. Ask your advertisers to place an ad just to highlight their horses, even if they don’t have show wins to brag about. Many times people just need to be asked or reminded – and don’t be afraid to tell them why you need their support right now.
Rescues are more obviously feeling the pinch. While money is always needed, think of other ways people can help. Depending on your state’s regulations you might not be able to have a lot of volunteers on the property, leaving you to do more of the manual labor and less time to spend in the office. Consider looking for volunteers that can help with other aspects of your operation that allow them to stay socially distanced. For example, you might find someone to help with your record-keeping or scheduling appointments. You could look for one or more people that can assist with your local promotion, from social media posts to writing and distributing press releases. Lots of people with lots of different skills are unemployed or under-employed right now and would welcome an opportunity to keep their skills sharp while helping you.
Equine-assisted therapy centers are also under the gun. Many of your riders need more hands-on assistance than can be given under social distancing rules, so your lesson volume is down yet you still have to maintain your horses. Similar to rescues, think outside the box for ways people can help, such as record-keeping and promotion. There are options for fundraising as well – for example, there’s a company that lets you design and sell t-shirts and similar apparel with no upfront inventory requirement, and they do the fulfillment as well. This helps raise funds and helps promote your program as more and more people are out and about displaying your organization’s name and artwork. For this group, staying in touch with your lesson clients is also important. Try to find the time – or a volunteer with time – to do photos or videos of your lesson horses and post them on social media or email them directly to your customers. While the smile on the child’s face won’t be quite as big as in person, they’ll still be thrilled to connect with their favorite horses. These ideas work well for regular lesson programs too!
While the world looks very different today than it did just a few months ago, we’re all learning to adjust, and eventually we’ll be much closer to the world we knew than the one we’re living in now. In the meantime, help if you can, and ask for help if you need it.
Submitted by: Molly O’Brien – Program Manager for Time to Ride
Resources for Equine Associations
Virtual Solutions for Association Events During the COVID-19 Pandemic
The April 2020 meeting of the American Physical Society (APS) was scheduled to take place in Washington DC. But when the coronavirus pandemic made a physical gathering impossible, the organizers decided to hold the entire event online and made registration free and open to everyone. With around 1,700 people typically attending the meeting, 7,267 registered this time. Nearly every sector of the equine community host in-person, large scale meetings and expos like this, and are faced with cancellations and rescheduling. Virtual events may be the best choice for our industry during this tumultuous time.
Online meetings might lack many of the benefits of an in-person conference: conversations over dinner; face-to-face networking; fresh perspectives that can come from simply leaving one’s home ground. Regardless, as more meetings move online — a trend likely to continue even after the pandemic fades — organizations may need to accept the new virtual reality of group gatherings. The most successful virtual conferences and meetings can seamlessly integrate speakers, technology, content, networking, and sponsors in a way that creates real impact for attendees. The interest in listening or engaging in multiple talks without leaving home has proven to be enticing to new participants, increasing engagement.
Virtual conferences might lack the intimacy of a physical gathering, but it’s still possible for attendees to connect with each other. Virtual event platforms often have a chat function allowing for real-time feedback. Some students and younger professionals might even find digital communication with industry leaders to be less intimidating than a face-to-face encounter, in addition to being less time intensive. Additionally, with the rising costs of travel and a decreasing amount of travel funding had ended opportunities for regular travel to far-off conferences. The COVID-19 pandemic may cause more conferences in the future to adopt a ‘hybrid’ approach, with both physical and virtual attendees.
Virtual meetings have some other advantages compared with a physical one. Live talks could be paused or rewound, a useful feature for those who missed details or wanted to spend more time pondering a crucial slide. Speakers can pre-record presentations in case of scheduling conflicts. Watching talks from home can ease a bit of the pressure of attending a large conference that would require dashing from one session to another across a vast convention halls. This allows for attendance to a wider variety of sessions than normal, for both speakers and attendees, since switching between parallel sessions can be seamless.
The pandemic continues to present interesting challenges for the equine industry and as solutions to these challenges present themselves, the American Horse Council with share them. Please contact the AHC at firstname.lastname@example.org with more questions or solutions you would like shared.
Submitted by: Cliff Williamson, Director of Health & Regulatory Affairs
With the struggles of trying to find different ways to stay engaged and active during these uncertain time of COVID-19, one organization, the American Quarter Horse Association (AQHA) is keeping their youth active and engaged. The AQHA, one of the oldest members of the American Horse Council (AHC), since 1970, has over 220,000+ members and over 18,000+ American Quarter Horse Youth Association (AQHYA) members. The AQHYA promotes leadership, competition, and other non-horse related activities for the horse loving youth and is the largest youth equine association.
AQHA will keep the AQHYA members engaged with the help of the AHC on Monday, June 8 and Tuesday, June 9, 2020 approximately 20 youth members will join the AHC for virtual Hill visits having meetings with Reps. Ted Yoho (R-FL) and Kurt Schrader (D-OR) who championed the Preventing All Soring Tactics (PAST) Act. AHC also reached out to Rep. Mac Thornberry (R-TX) to participate but has not confirmed. Another topic which may be discussed is federal funding for equine assisted therapy for veterans.
We look forward to helping the #MyWhyChallenge through Leadership Development for the Power of YOUth. These YOUth members are our leaders of tomorrow who are willing to learn today setting the stage for a lifetime of success.
Submitted by: Lynda Majerowicz, Membership Specialist
The following is from the American Horse Council:
AHC’s Tax Bulletin is Sponsored by
The American Horse Council keeps you up to date with important tax court cases and regulations with its bi-monthly Tax Bulletin. The Tax Bulletin is a member benefit, and thus is not intended for reproduction. For more information on federal legislation, equine health and regulatory issues, taxes, animal welfare, racing, recreation, and showing please visit our website at www.horsecouncil.org.
Copyright 2020. All rights to this AHC Tax Bulletin No. 395 is retained by the American Horse Council. No reproduction or distribution of this Tax Bulletin is permitted without prior written consent of the AHC.
Congress, President Deliver $2 Trillion Relief Package, Address Many Horse Industry Concerns
By, Bryan Brendle, American Horse Council
Following a week of intense negotiations, on Friday, March 27 House lawmakers finally passed – and the President signed into law – the Coronavirus Aid Relief and Economic Security (CARES) Act, teeing up approximately $2 trillion in emergency aid to American taxpayers, small business, independent contractors and non-profits and charities. Because most equine enterprises characterize themselves as small businesses and include many non-profits such as state associations and equine rescue operations, the package addresses many challenges facing the horse industry. The following are highlights from the relief package.
“PHASE 2” CORONAVIRUS RELIEF LEGISLATION INCLUDES IMPORTANT TAX PROVISIONS
By, Maddie Schueler, CPA, Dean Dorton, Lexington, KY
More than one week prior to enactment of the CARES Act, on March 18, President Trump signed legislation providing support to Americans affected by coronavirus. The Families First Coronavirus Response Act, or H.R. 6201, provides for paid sick leave and free coronavirus testing and expands food assistance and unemployment benefits. Notably, H.R. 6201 also provides businesses with tax credits for qualified sick and family leave wages paid to employees.
TREASURY AND IRS ISSUE GUIDANCE ON DEFERRING
TAX PAYMENTS DUE TO COVID-19 OUTBREAK
By Randy Catanese, Esq., Los Angeles, CA
On March 18, 2020, and following President Trump’s emergency declaration pursuant to the Stafford Act, the U.S. Treasury Department and Internal Revenue Service issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allows corporate taxpayers a similar deferment of up to $10 million of federal income tax payments that would otherwise be due on April 15, 2020, until July 15, 2020, without penalties or interests. The March 18 guidance did not change the April 15th filing deadline. The Administration, however, subsequently pushed back the filing deadline to July 15, aligning the filing and payment due dates.
CALIFORNIA AB-5 STAKES OUT MAJOR CHANGES IN WORKER CLASSIFICATION
© B. PAUL HUSBAND, A Professional Corporation, North Hollywood, CA
AB-5 is a measure enacted quickly by the California legislature, expressly intended to codify the California’s State Supreme Court decision in Dynamex Operations West, Inc. v Superior Court 4 Cal. 5th 903 (2018). Dynamex and AB-5 changed existing law significantly. This new line of authority uses a new test, the “ABC Test” to determine whether workers will be treated as employees or independent contractors. Application of the ABC Test heavily favors findings of employee status instead of independent contractor status, compared to the results of applying California’s longstanding Borello test. The Borello test is largely, but not completely discarded by Dynamex and AB-5. Borello remains operative law for some of the exceptions to AB-5.
IRS ISSUES NEW FINAL AND PROPOSED REGULATIONS
REGARDING BONUS DEPRECIATION DEDUCTION
By Randy Catanese, Esq.
The Tax Cuts and Jobs Act (“TCJA”) enacted in late 2017 increased the amount of Bonus Depreciation from 50% to 100% of the purchase price for property placed in service after September 27, 2017 and before January 1, 2023, so long as the property is eligible. Generally, horses which are eligible property include racing prospects, racehorses, broodmares and stallions. To qualify, these horses must be used predominantly within the United States. Other property to be eligible must have a recovery period of 20 years or less under the Modified Accelerated Cost Recovery System. The asset must be “placed in service” during the tax year where the bonus depreciation is claimed by the taxpayer. Under the TCJA the IRS was directed to promulgate regulations related to Section 168(k) of the Internal Revenue Code, as amended.
OPTIMIZING CHARITABLE GIVING
By Marsha Heinke, DVM, EA, CPA, CVPM, Grafton, OH
2018 Tax Law changes impacted the strategy for annual charitable giving, since the standard deduction increased substantially. The Tax Cuts and Jobs Act increased the standard deduction from $6,500 to $12,000 for individuals (adjusted annually for inflation) and from $13,000 to $24,000 for married joint filers. The change resulted in many more taxpayers taking the standard deduction. The Tax Foundation estimates only about 13.7% of taxpayers will itemize in 2019, down about 17 percentage points from years prior to 2018.
International Corner: The Sourcing Rules Often Provide Surprising Tax Results
By Robert Misey, Esq.
Reinhart Boerner Van Deuren s.c.,
Milwaukee, WI and Chicago, IL
I have never met Bob Baffert and I do not know his tax advisor, but whenever the Triple Crown races occur this year, I look forward to watching him on television with the King from Burger King. Nevertheless, I have always wondered how his tax advisor sources the income he receives from Burger King for being seen with the King.
The AHC Tax Bulletin is a digest of current tax developments affecting the horse industry. The AHC Tax Bulletin is for informational purposes only and not intended to take the place of professional tax counsel.
The following is from Protect The Harvest:
“NOT FOR HIRE” IS NOT GOOD ENOUGH – HOW THE ELD MANDATE WILL IMPACT THE HORSE INDUSTRY
As a breeder, owner, trainer or competitor in the horse industry, it is important to understand the implications of the ELD Mandate that will be hitting the transportation industry in December of 2017. The facts are that unless we all speak up you may be required to install an electronic logging device (ELD) in your truck.
There are some exemptions in place for farm or agricultural hauling where an ELD would not be required. However, many of the rigs used for hauling horses and the activities horse owners participate in, especially those that frequently travel to horse shows, fall outside the allowed exemptions.
What is the ELD Mandate?
In 2012, President Obama signed the bill Moving Ahead for Progress in the 21st Century. A part of this bill included a provision requiring the Federal Motor Carrier Safety Administration (FMCSA) to develop a rule mandating the use of electronic logging devices (ELDs) on commercial vehicles.
Do we have to comply since we are hauling horses, not cattle or other livestock?
Yes, horses are livestock and are specifically listed in the transportation bill language. It is not just the horse industry that is facing the ELD Mandate. Families that show cattle, pigs and other livestock and travel long distances to show and compete will be impacted as well. It will also impact any other type of activity or hobby that requires a large vehicle and trailer and where there is the potential to win money in competitions. The ELD Mandate requires that your vehicle must be fitted with a device under the following conditions:
• Your vehicle is a commercial vehicle (see below)
• Your activities fall outside of the exemptions allowed for agriculture and livestock transportation. Most who show horses will fall outside of the exemption requirements. (see below)
• You are required to obtain a Commercial Driver’s License due to the weight of your truck and trailer (see below)
The “Not For Hire” myth:
It is not uncommon to see “Not For Hire” graphics on trucks and horse trailers. The idea behind this is to avoid certain Federal Motor Carrier Safety Administration (FMCSA) regulations. This is an old fable that does not protect those hauling horses from fines for non-compliance. A “Not For Hire” sign on your rig will not protect you if it is determined that your truck and trailer fit into the commercial category or are being used for commercial purposes. Nor will it protect you if you are driving a vehicle and trailer that requires a commercial license.
A recreational vehicle exemption does not always apply:
Living quarters horse trailers can be classified as recreational vehicles for private use. This classification exempts both the truck and trailer from being considered commercial as well as the requirements for the driver to obtain a commercial driver’s license. However, if an officer or inspector determines that the truck and trailer is being used in “furtherance of a commercial enterprise”, then the driver and vehicle are out of compliance with FMCSA regulations which can result in fines and being detained for an extended period. For example, we have been made aware of situations where the owners of truck and trailers stopped by the Highway Patrol or other inspectors, were required to both obtain a Department of Transportation (DOT) number for their vehicle, and find a driver with a commercial driver’s license in order to resume their trip. In these cases, once the ELD Mandate is in effect, the drivers could also have been required to purchase and install an ELD unit. (see below for clarification about the meaning of “furtherance of a commercial enterprise”)
What does an ELD do?
The ELD or electronic logging device synchronizes with the engine of a vehicle and keeps track of hours of service. It logs driving time, vehicle speed, routes, and keeps track of mandated rest periods as well as other data points. Once the vehicle is in motion and reaches 5 miles per hour, the ELD keeps track of time for the next 14 hours – nonstop. Under the standard ELD regulations, there are no provisions to account for traffic, fueling, or loading and unloading. In those 14 hours, drivers are only allowed to drive for 11 hours. Because of this, drivers are forced to drive as much as they can during the 14 hours once the clock on the ELD starts.
Ten-hour rest period:
When the 14-hour limit has been reached, the ELD indicates to the driver that they must stop and “rest” for 10 consecutive hours. The ELD keeps track of any “infractions” – that is, going over the 14 hours as well as vehicle speed – and has reporting functions so inspectors can review the logs and fine drivers for infractions from days past. This means that those hauling horses will be required to stop their trip once the 14-hour threshold is reached and cannot resume travel until the 10-hour rest period has passed. If the threshold is breached, the ELD makes a record that can be reviewed by authorities and you can be fined.
Have you noticed in the last several years all of the trucks that are parked along the side of the road? Have you noticed that on and off ramps and picnic and rest areas are sometimes filled up with trucks? Those typically are drivers that have reached their limit and have to immediately find a place to park their trucks to avoid costly violations. If you are required to install an ELD for your truck and horse trailer, this could easily happen to you too.
According to the Hours of Service outlined in the Federal Motor Carriers Safety Administration rules, rest breaks are mandatory in addition to the ten-hour rest period. Commercial drivers are required to take a 30-minute break within the 11 hour driving period and cannot go past 8 hours without taking a break. This mandatory break is calculated from when the vehicle starts moving and is tracked by the ELD. It does not take into account any other stops or breaks that may have occurred within the 8-hour time period. The break must be 30 consecutive minutes. A driver cannot substitute the 30-minute break with a 10-minute break and later a 20-minute break. There is no getting around this as the ELD records and stores the 30 consecutive minute break periods and will subject the driver to penalty for a rule violation upon inspection. Additionally, the 30-minute break is included in the 14-hour time limit.
What constitutes a Commercial Motor Vehicle (CMV) classification?
• Are you writing off your truck or trailer as a business loss or expense on your tax returns? Tax write offs for your truck and trailer would make them fall under the commercial classification.
• Are your truck and/or trailer being used for your business? If your truck or trailer is being used for your business, they fall under the commercial classification. If you are a trainer, your truck and trailer is used for business, there’s no doubt about it. If you are a non-pro or amateur competitor, your truck and trailer can be considered as used for business (see “furtherance of a commercial enterprise” explanation below). If you are a non-pro or amateur and breed horses and sell them, your truck and trailer are considered as used for business.
• Do you only haul your own horses? If not and if you collect payment, (for example splitting fuel costs) to haul a friend or client’s horse to a show, to the trainer, to the vet, or to the breeder, your truck and trailer are considered commercial vehicles.
• Have you won money competing with your horse or a client’s horse? Even though most often competing with horses is not profitable for a non-pro when calculating all the costs, the FMCSA could consider money won at a horse show or event, a profit. They can also consider hauling to an event with the intent or hopes of winning some money, as pursuing a profit. This definition of “profit” then classifies your truck and trailer as commercial.
• Do you have sponsors? Do you have their stickers on your truck or trailer? Just about everyone knows a roper, rodeo or horse show contestant who has a “day job” (horseshoer as an example) that spends part of their time traveling to events to compete. In many cases, especially with rodeo events, (some associations have strict rules about sponsorships and others do not) they also have sponsors, whether its ropes, saddle pads, clothing or other equipment. Those sponsorships qualify as “furtherance of a commercial enterprise” and then puts them in the commercial category.
• If your vehicle has a Gross Vehicle Weight Rating of more than 10,000 pounds and is used for your business or with the intent to make a profit (see “furtherance of a commercial enterprise” below”), or involved in interstate commerce, like going to horse shows out of your home state, it then falls into the commercial vehicle classification by the Federal Motor Carrier Safety Administration (FMCSA).
What “furtherance of a commercial enterprise” means:
The FMCSA rule has some language that is far reaching with significant ramifications for horse enthusiasts. The category “furtherance of a commercial enterprise” is one of the qualifications considered when determining whether a driver and their truck and trailer fall under the commercial classification and apply to the scenarios we have listed above.
Here’s the information as outlined on the FMCSA website’s Q&A section:
“ Question 21: Does the exemption in §390.3(f)(3) for the “occasional transportation of personal property by individuals not for compensation nor in the furtherance of a commercial enterprise” apply to persons who occasionally use CMVs to transport cars, boats, horses, etc., to races, tournaments, shows or similar events, even if prize money is offered at these events?
Guidance: The exemption would apply to this kind of transportation, provided: (1) The underlying activities are not undertaken for profit, i.e., (a) prize money is declared as ordinary income for tax purposes, and (b) the cost of the underlying activities is not deducted as a business expense for tax purposes; and, where relevant; (2) corporate sponsorship is not involved. Drivers must confer with their State of licensure to determine the licensing provisions to which they are subject.”
Do I need a Commercial Driver’s License?
Your truck and trailer can be considered a commercial vehicle without the requirement that you obtain a Commercial Driver’s License (CDL). However, you will need to obtain a CDL if your vehicle fits the following categories:
• Any combination of vehicles with a gross combined weight rating (GCWR) of 26,001 or more pounds. For example, if your dually has a GVWR of 10,000 pounds and your horse trailer has a GVWR more than 16,000 pounds, a commercial license is required.
• Any single vehicle with a GVWR of 26,001 or more pounds.
What is the GVWR (Gross Vehicle Weight Rating)?
• The GVWR is the value specified by the manufacturer as the maximum loaded weight of a single vehicle or combination of vehicles, or the registered gross weight.
What is the GCWR (Gross Combined Weight Rating)?
• The GCWR is the value specified by the manufacturer as the GVWR of the power unit plus the GVWR of the towed unit or units, or the combined registered weight of the power unit plus the towed unit(s). The GCWR includes the passengers and cargo in the tow vehicle, plus the weight of the trailer and cargo in the trailer.
What are the ongoing requirements for a Commercial Driver’s License?
After passing the written and driving examination for a commercial license, including other steps such as a special medical examination, drug testing, and vehicle inspections, there are ongoing requirements for driving a vehicle that fall under the commercial classification. Each state has their own set of regulations in addition to the federal code so it is important to understand the laws in your state in regards to a commercial license.
Do I need to have a Department of Transportation (DOT) number?
Your vehicle may require a USDOT (Federal) number if your vehicle and travel meet the following conditions:
• Your truck and trailer are considered commercial vehicles. This applies if you use your truck and trailer for business or for “furtherance of a commercial enterprise” (see above).
• The GVWR is over 10,000 pounds
• AND if you travel into other states
Depending on the state in which you live, you may also be required to obtain a State DOT if your truck and trailer are considered commercial vehicles.
HOS or Hours of Service:
Most drivers of commercial vehicles must comply with Federal Motor Carrier Safety Administration (FMCSA) Hours of Service.
Hours of Service require that drivers can only be on the road for 11 hours of a 14 hour shift. However, with the ELD, and the fact that the machines start recording time from the moment wheels move past 5 miles per hour, drivers are not able to make allowances for traffic, loading and unloading, and taking a longer rest, or breaking up rest time.
There are some exceptions to compliance with Hours of Service. They are listed below.
ROD or Record of Duty:
The Record of Duty (ROD) is a log book that every driver of a commercial vehicle must maintain and keep on file for 6 months. The following information must be logged into the ROD:
• The status for each 24-hour period
• Time must be recorded in duplicate
• Time for Off Duty
• Driving Time
• Time spent sleeping
• Time on duty but not driving
• Each change in duty status that is recorded on the log must also include the name of the city/town/village and state.
• Other supporting documentation must also be maintained to coincide with the ROD (log book) these include toll receipts, fuel receipts, and other documentation.
If you have a commercial vehicle and your activities fall outside of the exemptions for farming and agriculture, you will be required to install an ELD
If you have a Commercial Driver’s License and therefore are required to follow the Hours of Service and keep a Record of Duty, you will be required to install an ELD
Are there situations where we are not required to follow the Hours of Service (HOS) or install an ELD?
Drivers transporting ‘agricultural commodities,’ including livestock, are exempt from the Hours of Service regulations while operating within 150 air-miles of the source of such commodities. Vehicles and drivers are exempt if they are not:
• Hauling farther away than 150 miles and not more than 8 days in a 30 day period. To put this in perspective, if you travel to a horse show, and are driving more than 150 miles to reach the show grounds, your trip there and back counts as driving days. If you stay in a hotel instead of on the showgrounds, any driving to the show grounds counts as days. In this light, it is pretty easy to consume the 8 days in a 30 day period if you attend more than one horse show during that time, or go to horse shows that last an extended period of time. If you are traveling to horse shows frequently, and drive a dually with a 4+ horse trailer, you are more than likely to fall into the classification where an ELD is required on your vehicle.
• Drivers of vehicles manufactured before 2000 are not required to implement an ELD.
• Drivers will be required to use an ELD if they use a paper log more than 8 times in a rolling 30 day period. (Exceed 12 hours or more than 100 air miles from terminal). Once a driver has exceeded that threshold, they’ll have to drive an ELD equipped truck until their 30 day record drops to 8 or less paper log events.
Short haul vehicles are exempt from the ELD Mandate. There are a few key components required to meet the FMCSA definition for short haul.
• Start and return to same location within 12 hours of duty time
• Drive no more than 11 hours
• Have ten consecutive hours off between shifts
• Maintain your time clock function. Meaning, employees who are on the clock, punching in and out for work.
• Not exceed a 100-mile radius from your starting location
What can we do about this government overreach?
Representatives from Protect The Harvest as well as Lucas Oil have been working hard to bring these issues to light. In addition to sharing information, we have made trips to Washington DC to meet with lawmakers. There are other groups that have also been sounding the alarm about the ELD Mandate. We need to do more and we need your help. If you have concerns about how the ELD Mandate and other regulations will impact your business or enjoying horses as a hobby, the time is now to act. Make sure to let others know about what is coming up. Share information and encourage others to do so as well. Get your local clubs and groups involved too. Most importantly, contact your Congressional Representative and let them know your concerns. They have heard from group representatives, now they need to hear from individuals, as many as possible. If we don’t act now, soon many of us including those that simply enjoy showing animals, or other hobbies that require a truck and trailer, will be required to install electronic logging devices on our vehicles.