Three bills introduced by U.S. Rep. Andy Barr (R-KY) last week would boost participation in Kentucky’s horse industry by reforming the tax code to make investments in horses more equitable.
More than 40,000 Kentuckians are employed in the equine industry, which has an overall economic impact of $3 billion, according to the University of Kentucky Department of Agriculture Economics.
“Kentucky’s signature horse industry is not only essential to the history and culture of the Commonwealth, but also to our economy,” Barr, the chairman of the Congressional Horse Caucus, said. “The reforms included in these three bills will encourage growth and investment in the equine industry which will create jobs and benefit all Kentuckians.”
Barr said his legislation is focused on leveling the playing field between investments in the horse industry and other types of investments.
The Race Horse Cost Recovery Act, H.R. 1804, would reschedule race horses that compete before the age of two into a three-year depreciation asset class, down from the current seven-year depreciation schedule, to better reflect the useful life of horses.
The Equine Tax Parity Act, H.R. 1805, would reduce the equine investment holding period require from 24 months to 12 months to allow investments to qualify for capital gains treatment earlier.
The Race Horse Expensing Certainty Act, H.R. 1806, would allow for all racehorse investments to be immediately expensed, providing clarity and certainty under Section 179 of Internal Revenue Code.