Washington, D.C.— Today, Congressmen Barr and McGarvey reintroduced two pieces of legislation to incentivize investment in Kentucky's signature equine industry. The Race Horse Cost Recovery Act of 2023 would make the three-year depreciation schedule permanent for racehorses, regardless of their age when put into service. Currently, Congress must reauthorize this provision in the tax law on an annual basis. The Racehorse Tax Parity Act would reduce the holding period for equine assets to be considered long term capital gains, putting them on a level playing field with other similar assets. Congressmen Barr and McGarvey’s bills are endorsed by the National Thoroughbred Racing Association (NTRA), the Kentucky Thoroughbred Association, the Thoroughbred Owners and Breeders Association, Keeneland, the American Horse Council, and the Jockey Club.
“Permanently delivering these tax incentives for owners and breeders will strengthen investment in our signature equine industry,” said Congressman Barr, who serves as Co-Chair of the Congressional Horse Caucus. “I am proud to lead this effort with my friend, colleague, and fellow Kentuckian, Congressman McGarvey. We will continue to work together to deliver results for Kentucky’s signature industries.”
“I’m proud to join my colleague and friend, Congressman Barr, in this effort to strengthen our state's signature equine industry,” said Congressman McGarvey. “This legislation will deliver much-needed tax incentives for owners and breeders, fostering growth and investment in this critical industry and ensuring Kentucky remains the horseracing and breeding capital of the United States.”
“I commend Congressmen Barr and McGarvey for their dedicated leadership to promoting investment in the thoroughbred industry,” said former Congressman & National Thoroughbred Racing Association (NTRA) President and CEO Tom Rooney. “Initiatives like 3-year depreciation for yearlings and other initiatives crucial to the furthering of the equine economy. We look forward to working with their colleagues in both the House and the Senate to get these bipartisan pieces of legislation to the President’s desk this Congress.”
“The Kentucky Thoroughbred Association proudly endorses The Race Horse Cost Recovery Act of 2023 and The Racehorse Tax Parity Act, and is very grateful to Congressmen Andy Barr and Morgan McGarvey for introducing them. Kentucky breeders produce foals that become racehorses in 38 states, and the 3-year depreciation encourages racehorse ownership which we know supports 241,000 direct racing sector jobs nationwide as well as the 60,000 direct, indirect and induced jobs in the Commonwealth of Kentucky,” said Chauncey Morris, Executive Director of the Kentucky Thoroughbred Association.
“The Thoroughbred Owners and Breeders Association fully endorses Congressmen Barr and McGarvey's bills to reward investment in our great sport,” said Dan Metzger, President of the Thoroughbred Owners and Breeders Association. “We thank them for their consistent support for owners and breeders and the thoroughbred industry as a whole.” -President of the Thoroughbred Owners and Breeders Association Dan Metzger
“We thank Congressman Barr and Congressman McGarvey for their strong commitment to Thoroughbred racing and breeding and their consistent support of legislation critical to our industry,” -Keeneland President and CEO Shannon Arvin said. “The three-year depreciation of racehorses (similar to other investment assets) and the holding period for capital gains are important to enhancing investment in Thoroughbred horses and to maintaining the vibrant trade we have experienced in recent auction seasons at Keeneland.”
“These two tax measures, which make the depreciation schedule a permanent feature of the tax code and align the holding period of a racehorse with other types of long-term assets for investments, will provide relief to owners, breeders, and investors. These measures provide clarity and fairness to the byzantine tax treatment of an important sector of the equine industry. The long-term effect will create more opportunities for growth which is beneficial for all industry stakeholders – from investors to workers. We commend these industry stewards for taking the lead on these much-needed improvements to the tax code.” -American Horse Council President Julie Broadway
The Jockey Club wholeheartedly supports the Race Horse Cost Recovery Act of 2023 and the Racehorse Tax Parity Act of 2023 introduced by Congressmen Andy Barr (R-KY) and Morgan McGarvey (D-KY). Together, these bills will put horse ownership on par with other investment assets where they should be. We commend Congressmen Barr and McGarvey for taking the lead to fix these inequities. These bills address two key deficiencies of the tax code. First, the Race Horse Cost Recovery Act will permanently decrease the depreciation schedule eligible to racehorses from seven years to three for racehorses that are put into service before the age of two into the three-year depreciation asset class. The three-year depreciation schedule accurately reflects the typical career of a racehorse since nearly three-quarters of foals that race have a career of four years or less. This change has been enacted by Congress on a temporary, year-to-year basis since 2008, and needs to be permanent law. Second, the Race Horse Tax Parity Act will reduce the holding period required for equine assets to be considered long-term capital assets from 24 months to 12 months, putting them in line with other investments, such as homes, stocks and bonds. The U.S. horse racing industry 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, and we applaud Congressman Barr and McGarvey for their efforts on behalf of this great industry. -The Jockey Club President and COO James Gagliano