What is it?
This bill — known as the Race Horse Cost Recovery Act — would make permanent a provision in the tax code that allows race horses which are put into service before the age of two to be depreciated over a three-year, rather than a seven-year schedule. Currently the tax code allows race horses to be depreciated using a three-year schedule, but the provision isn’t permanent law so Congress has to renew or else it will sunset and revert to the old seven-year schedule.
In-Depth: Sponsoring Rep. Andy Barr (R-KY) also introduced this legislation during the last session of Congress, when the three-year depreciation schedule for race horses was renewed temporarily once again, saying at the time:
“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. That’s why I am proud to introduce [this 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.”