Senator McConnell's Amendment to Promote Kentucky's Horse Industry Included in Farm Bill
*The Equine Equity Act will provide tax relief for horse owners*
U.S. Senate Republican Leader Mitch McConnell announced Wednesday that the Senate approved his legislation to promote investment in the horse industry. The Equine Equity Act is now included in the Farm Bill, which is currently under consideration by the Senate.
"Horses are a vital part of Kentucky's economy and cultural heritage," McConnell said. "They are the Commonwealth's largest agricultural product, adding $3.5 billion to our economy and directly employing more than 50,000 Kentuckians."
The Equine Equity Act of 2007 will reduce the capital gains holding period for horses and allow horse owners to depreciate all racehorses over the same period. It reduces the capital gains holding period for horses from 24 months to 12 months, which is the case with most capital assets. Currently, horses must be held for two years to receive capital gains treatment.
While many Americans identify the horse industry as one of Kentucky's signature industries, its economic impact extends well beyond the borders of the Commonwealth. A recent study found that the horse industry contributes approximately $39 billion in direct economic impacts to the U.S. economy each year. It sustains 1.4 million full-time equivalent jobs each year, with over 460,000 of those jobs created from direct spending within the industry.
Nearly 2 million Americans own horses, either for racing, showing or recreational purposes. Only about one-quarter, 28 percent, of U.S. horse owners have incomes greater than $100,000. Thirty-four percent of horse owners have an income of less than $50,000.
"Like many businesses, outside investments are essential to the operation and growth of the horse industry," McConnell said. "Without investors willing to buy and breed horses, it is impossible for the industry to thrive."