Two U.S. congressmen from Kentucky, Andy Barr (KY-06) and Morgan McGarvey (KY-03), have reintroduced two bipartisan bills aimed at strengthening the state’s equine industry. The proposed legislation seeks to create tax incentives for investment in racehorses and ensure fairness in tax treatment for the industry.
Key Proposals in the Bills
The Racehorse Cost Recovery Act aims to make the three-year depreciation schedule for racehorses permanent, regardless of their age when placed into service. Currently, this schedule requires annual congressional approval, creating uncertainty for investors. By eliminating the need for renewal, the bill seeks to encourage long-term investment in racehorses.
The Racehorse Tax Parity Act proposes shortening the holding period required for equine assets to qualify for long-term capital gains treatment. This would align racehorse investments with similar industries, ensuring fairer tax treatment and promoting a level playing field for horse owners and investors.
Congressmen Voice Their Support
Congressman Andy Barr, Co-Chair of the Congressional Horse Caucus, emphasized the economic importance of the equine industry to Kentucky.
“Kentucky’s equine industry is not just a cultural cornerstone but also a vital economic driver for our Commonwealth. By making the three-year depreciation schedule for racehorses permanent and reducing the holding period for equine assets to qualify for long-term capital gains treatment, we are providing much-needed certainty and fairness in the tax code. These reforms will encourage investment, support the livelihoods of countless Kentuckians, and ensure that our horse industry remains competitive on a national and global scale.”
Congressman Morgan McGarvey echoed Barr’s sentiments, stressing that the bipartisan effort is crucial for the state’s economy.
“I’m proud to once again work with my colleague and friend, Congressman Barr, to strengthen our state’s signature equine industry. This important legislation will grow our state’s economy and ensure Kentucky remains the horseracing and breeding capital of the United States.”
Industry Leaders Applaud the Bills
Kentucky’s equine industry leaders have welcomed the legislative move, highlighting the importance of policies that encourage investment and ensure stability.
Shannon Arvin, President and CEO of Keeneland, expressed gratitude for the initiative.
“We are grateful to Congressman Barr and Congressman McGarvey for their continued support of legislation that is critical to the future success of our industry. Policies that promote investment in racehorses are vital to sustaining a strong and dynamic Thoroughbred marketplace.”
James Gagliano, President and COO of The Jockey Club, also praised the proposed tax reforms.
“These bills will put horse ownership on par with other investment assets where they should have been all along. They address two key deficiencies in the tax code that unfairly single out horseracing—an industry that directly and indirectly contributes $36.6 billion to the GDP and provides 472,000 jobs nationwide. This reform is needed to ensure the tax code treats our industry like other businesses.”
Support from Key Industry Organizations
The bills have received backing from several prominent organizations, including:
- National Thoroughbred Racing Association (NTRA)
- National Thoroughbred Association
- Keeneland
- The Jockey Club
These organizations believe that the tax reforms will make racehorse ownership more financially viable, helping sustain the long-term growth of the industry.
Economic Significance of the Equine Industry in Kentucky
Kentucky is often referred to as the “Horse Capital of the World,” and its equine industry plays a vital role in the state’s economy. With world-famous events like the Kentucky Derby and a thriving horse breeding and racing scene, the industry generates billions in revenue and supports thousands of jobs.
By introducing these legislative reforms, Barr and McGarvey hope to further secure the state’s standing as the premier hub for horse racing and breeding in the U.S.
What Happens Next?
Both bills will now move forward for debate in Congress. If passed, they could provide long-term stability and financial benefits to horse owners, breeders, and investors, ensuring that Kentucky’s equine industry continues to thrive on both national and global stages.
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