New Mexico’s governor vetoed a bill that would have increased the registration fee pet food manufacturers pay to the state, reported the Santa Fe New Mexican. The vetoed House Bill 64 would have raised the fee from US$2 to US$100 for each pet food product sold in New Mexico. The revenues from the higher fees would be used to fund dog and cat sterilization programs for low-income residents of the state.
Potential reduced euthanasia versus lower in-state retail sales
State Representative Carl Trujillo (D-Santa Fe) and his colleagues filed the bill with the state legislature, reported KOB4. Trujillo stated that New Mexico earns US$16,000 in registration fees, while dog and cat food companies sell US$110 million worth of pet food. He pointed to similar legislation passed in Maine, Maryland and West Virginia. Maryland’s animal shelters, for example, reported a 43 percent reduction in cat euthanasia and a 25 percent reduction in dog euthanasia since the bill’s passage in 2013, he said.
However, New Mexican pet retailers worried that the bill could push more people to buy pet food online, reported KOAT7. Pet food retailers believe manufacturers may pass the cost of the registration fees on to consumers. Brick-and-mortar retailers fear that could hurt local stores, if online retailers remain immune to the increased registration fees.
International examples of pet food taxes
In other parts of the world, increased taxes or fees on pet foods had varied results.
The cost of pet nutrition in India went up, following the introduction of a goods and services tax (GST) in July 2017, reported Indian Express. After the passage of the GST, the tax on pet food increased to 18 percent, from 14 percent where it was beforehand under a value-added tax system.
However, this increased tax on pet food doesn’t seem to have diminished demand. A Mars Petcare sales officer told the Indian Express that Hyderabad had enjoyed an 18 percent increase in packaged animal food sales so far this fiscal year.
In 2014, a 16 percent luxury tax on pet food in Mexico seemed to lead to more abandoned and neglected dogs in Tijuana, according to a KPBS report. The tax was meant to help ease Mexico's budget woes. Josh Pratter, director of Baja Dog Rescue in Tijuana, said the group saw the result of the tax on the abandoned dog population.