File Photo

BC Tax Break Passes Kentucky Senate

Legislation containing a tax break for the Breeders' Cup passed the Kentucky Senate.

A 187-page bill that passed the Kentucky Senate March 13 includes provisions for a tax break for the Breeders’ Cup World Championships if the event is held in Kentucky in 2011 or 2012, or 2011 and 2012.

The legislation deals with numerous economic development initiatives. The Breeders’ Cup language was submitted by Republican Sen. Damon Thayer, who has proposed such tax breaks in the past.

The World Championships will be held in Kentucky at Churchill Downs in 2010. Breeders’ Cup hasn’t announced host sites for subsequent years.

The legislation, which now moves to the House of Representatives for concurrence, removes the excise tax on pari-mutuel wagering on any live race conducted during a “one- or two-day international horse racing event” held at a Kentucky track from 2009-12. Total purses must exceed $15 million; the only such event in the United States is the Breeders’ Cup.

If the requirements of the bill have been satisfied by 2013, the tax break would remain in effect for any succeeding Breeders’ Cup if it returns to Kentucky within three years of its most recent running. The bill states that a minimum of $500,000 of the tax break must be used to fund undercard races during Breeders’ Cup.

"(The bill) would reauthorize a new version of the Breeders' Cup tax credit which expands the credit to the new two-day format, requires that $500,000 of the credit be utilized to fund undercard stakes purses during the Breeders' Cup, and states that the Breeders' Cup must be run in Kentucky at least twice between 2009 and 2012," Thayer said March 15. "The one-day Breeders' Cup format resulted in a $30-million economic impact in Kentucky, according to a University of Louisville study. A two-day format would probably generate $40million-$50 million, in addition to the increase in activity at horse sales held in Lexington in the days after the Breeders' Cup.

"This is not a simple reauthorization of the old tax credit. It is a new credit that hopefully will entice Breeders' Cup planners to return the event more regularly to Kentucky, where it has had its best financial results in previous runnings."

The measure also states that any Kentucky track that races at least 30 days a year would be entitled to a one-day pari-mutuel tax break. The exceptions are days on which the Kentucky Derby (gr. I) and Kentucky Oaks (gr. I) at Churchill, and Toyota Blue Grass Stakes (gr. I) at Keeneland, are held. For example, Turfway Park could use the tax holiday for the Kentucky Cup or Lane's End Stakes (gr. II) programs.

Also on March 13, the Senate passed legislation to expand the powers of the Kentucky Horse Racing Commission, but it contains no provisions for a new funding source for the regulatory agency. The House later concurred, and the bill goes to Gov. Steve Beshear.