Congressman Andy Barr (R-Kentucky) has introduced a measure that would make permanent the three-year depreciation schedule for all race horses that is scheduled to expire with the 2008 Farm Bill at the end of the year.
In a statement, Barr said his introduction of H.R. 2212, the Race Horse Cost Recovery Act, is designed to help protect Kentucky's equine industry that he said contributes more than $4 billion annually to the economy.
"Providing the certainty of a three-year depreciation schedule is critical to the health of Kentucky's signature horse racing industry, as well as job growth in other horse-related industries," Barr said. "That's why I am proud to introduce H.R. 2212, the Race Horse Cost Recovery Act, a bill to make permanent the three-year depreciation schedule, which will encourage more job creation and investment in Kentucky's signature equine industry, and end the uncertainty of the current, temporary depreciation schedule for race horses.
"Kentucky's horse industry contributes $4 billion annually to our economy and provides over 80,000 direct and indirect jobs to Americans. We must protect this investment and these jobs for the sake of Kentucky's hard-working families."
In a letter to Rep. Dave Camp (R-Michigan), chairman of the House Ways and Means Committee, and Rep. Frank Lucas (R-Oklahoma), chairman of the House Committee on Agriculture, Barr explained that previous to the current three-year depreciation schedule all race horses were subjected to a seven-year depreciation schedule.
That section of the 2008 Farm Bill stipulated that "beginning Jan. 1, 2014, these conditions will change and only race horses "placed in service (beginning training) after the age of two will be eligible for the three-year depreciation schedule."
Barr said those changes "do not reflect the realities of the horse racing industry. Many race horses begin training before the age of two as 1-year-olds. Moreover, the average racing career of race horses is three years... Despite these realities, beginning next year many of our nation's race horses will be subjected to a seven-year depreciation schedule—a depreciation schedule that is double the length of the average racing career."
In his letter, Barr also called for his colleagues to support the Equine Tax Parity Act that would lower the capital gains holding period on equine sales from 24 months to 12 months.
In addition to its impact on the Kentucky economy, the U.S. horse industry contributes $112 billion annually to nation's economy and provides more than 1.4 million full-time direct and indirect jobs, Barr said in his letter.
In a statement, the National Thoroughbred Racing Association said: "The NTRA applauds Congressman Andy Barr for introducing H.R. 2212, the Race Horse Cost Recovery Act. If enacted, this much-needed legislation will help the horse industry protect hundreds of thousands of jobs and maintain over $100 billion in annual spending nationwide. Congressman Barr is a true champion for Kentucky's signature equine industry and the NTRA looks forward to working with him to build support for this important legislation."