Sayyiduna Abu Hurayrah (may Allah be pleased with him) said that the Messenger of Allah (peace and blessings be upon him) said: "There is no owner of gold or silver who does not pay its zakah" Then he narrated the hadith about the threatened punishment for withholding its due and the dues of camels, cattle and sheep, and regarding the due of camels he mentioned that it includes milking them on the day they come to water. It was said: O Messenger of Allah! What about horses? He (peace and blessings be upon him) said: "Horses are of three kinds: for one man they are a burden, for one a reward, and for one a cover. The one for whom it is a burden is the man who tied it up for show, pride and hostility towards the people of Islam; it is a burden for him. The one for whom it is a cover is the man who tied it up in the path of Allah, then did not forget the right of Allah regarding its back or its neck; it is a cover for him. The one for whom it is a reward is the man who tied it up in the path of Allah for the people of Islam in a pasture; whatever it eats from that pasture, good deeds equal to it are written for him, even its dung and urine count as good deeds; and if it breaks its tether and gallops over one or two hillocks, its hoofprints and its dung and urine are also counted as good deeds; and its owner does not pass with it by a river from which it drinks, though he had no intention of watering it, except that Allah, Glorified be He, records good deeds in his record equal to what it drank." It was said to him (peace and blessings be upon him): What about donkeys? He (peace and blessings be upon him) said: "Nothing has been revealed to me concerning donkeys except this comprehensive verse: 'So whoever does an atom's weight of good will see it, and whoever does an atom's weight of evil will see it.' [Surah al-Zalzalah: 7-8]"
In one narration it says: he does not forget the right of Allah regarding their backs and bellies, in hardship and in ease; and this does not indicate zakah.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الزكاة / 7418
Sayyiduna Jabir (may Allah be pleased with him) said that the Messenger of Allah (peace and blessings be upon him) said concerning grazing horses: "On every horse there is one dinar."
Ghurak alone narrated it. Ali bin Umar al-Hafiz (al-Daraqutni) said: Ghurak alone narrated it from Ja'far; he is very weak, and those below him in the chain are weak.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الزكاة / 7419
Ya'la said that Abd al-Rahman bin Umayyah (may Allah be pleased with him) bought a mare from a man in exchange for one hundred young she-camels (qalus). Then something became apparent to him, and the seller regretted it; he came to Sayyiduna Umar (may Allah be pleased with him) and said: Ya'la and his brother have seized my mare. So Sayyiduna Umar (may Allah be pleased with him) wrote to Ya'la: Come and meet me. He came and informed him, and he said: Do horses reach such a value among you? He said: I do not know whether horses have reached this before or not. Then Sayyiduna Umar (may Allah be pleased with him) said: We take one sheep out of every forty sheep, and take nothing at all from horses! So collect one dinar from every horse. So he fixed one dinar on each horse.
We have narrated earlier on this matter what indicates that Sayyiduna Umar (may Allah be pleased with him) ordered this only when the owners wished it. If this narration is authentic, it is to be understood in the same way, so that the narrations agree and do not conflict. The hadith of Irak from Sayyiduna Abu Hurayrah (may Allah be pleased with him) is the most authentic of what has been narrated on this, and it decisively negates zakah on horses. And Allah knows best.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الزكاة / 7420