Was placing handler-controlled attack-trained guard dogs on a client's fenced property overnight a taxable rental of the dogs?

Plain-English summary

A taxpayer placed guard dogs inside a client's fenced premises at night after the client left and removed them before the client returned in the morning. The dogs were trained to attack anyone—including the client—except their handler.

Headquarters Tax Counsel said the Board would have difficulty finding a lease/rental. Transferred possession was questionable, and the dogs certainly were not under the client's direction/control.

The taxpayer's receipts therefore were not taxable. The source supplies no agreement, handler arrangement, client access/custody, invoices, audit or outcome and cites no legal authority. It does not label or analyze a separate bundled security service.

Common questions

Did presence on the client's property establish a lease?

No. Location alone did not establish transferred possession or control.

Could the client direct the dogs?

No. They responded only to their handler and were trained to attack the client as they would another person.

Was the client present while the dogs guarded the property?

No. They arrived after the client left and were removed before the client returned.

Were the taxpayer's receipts taxable as dog rent?

No under the memorandum.

Did counsel definitively decide possession?

No. The memorandum calls transfer questionable; lack of direction/control independently supported its conclusion.

Are the agreement and service records available?

No. The source supplies neither contract, handler/client custody terms, invoices nor tax/audit outcome.

Citations and references

• April 14, 1969 Los Angeles District memorandum — described but absent
• May 19, 1969 Headquarters Tax Counsel memorandum — no statute, regulation, case or identified ruling
• Client/dog/handler/access/invoice/tax/audit records — absent
• Official Annotation 330.2280 — close factual/result restatement without source limits

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 330.2280
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/330-2280.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Los Angeles District – District
Principal Auditor (JTQ)

From:

Tax Counsel (LAA) Headquarters

Subject:

Guard Dogs

330.2280

Date:

May 19, 1969

Your memorandum of April 14, 1969, asked whether the business of placing guard dogs on a client’s fenced premises at night is to be considered a rental of the dogs. The dogs have been trained to attack anyone (including the client) except their handler. The dogs are left on the premises at night after the client leaves and are picked up in the morning before the client arrives. In my opinion, we would have difficulty finding this to be a lease or rental of the dogs. Whether “possession” is transferred is questionable, and the dogs certainly are not under the direction and control of the client (lessee). The taxpayer’s receipts, then, are not subject to tax.

LAA:ph
Cc: Van Nuys – Subdistrict Administrator