About NTRA Advocacy

The National Thoroughbred Racing Association uses political advocacy in Washington, D.C. to protect and grow the horse racing and breeding industries. As a 501(c) (6) membership organization and trade association, the NTRA lobbies and raises Political Action Committee funds through Horse PAC® to help Federal candidates who understand our industry’s issues. NTRA President and CEO Tom Rooney and Jordan Bonfitto, Director of Government Affairs, lead NTRA’s advocacy efforts in Washington, DC on behalf of the Thoroughbred industry. NTRA’s lobbying efforts make the Thoroughbred industry more competitive and ensure the industry has a seat at the table as policy makers craft laws and regulations. As a trade association, the NTRA works proactively with other industry groups to address matters such as equine health and safety, unwanted horses, medication, horse identification and sales integrity.

Tax

Under current law, there are three ways in which horse owners can potentially write off the cost of the purchase of a horse.

  • 60% of the cost using “bonus depreciation”: This phases down to 40% after the end of 2024 and by an additional 20% each year through 2026, when it becomes completely phased out starting in 2027. Bonus depreciation is not limited to net income – it may be used to create or increase a net loss.
  • 100% of the cost using section 179 expensing for small businesses (this was significantly expanded beginning in 2018 with a limit of $1 million in annual costs, adjusted for inflation each year), and to the overall amount of income earned in the business in which the property is used. There are caps to the total amount written off ($1,160,000 for 2023), and limits to the total amount of qualifying property purchased ($2,890,000 in 2023). The deduction begins to phase out on a dollar-for-dollar basis after $2,890,000 is spent by a given business. For example, if you purchase $2,990,000 of property, you’ll have gone over the cap by $100,000. So your maximum Section 179 expense will be $1,060,000 ($1,160,000 minus $100,000). This is a permanent part of the tax code.  Section 179 expensing may only be used to offset net income.
  • Depreciating the cost of the horse over a statutorily prescribed depreciation schedule (3-years or 7-years): The 3-year depreciation for racehorses under age two (typically, yearlings) expired at the end of 2021. In other words, current law is owners must write off the cost of horses which are less than two years of age when placed in service in 2022 over 7-years. However, Congress may – and typically has – pass a “tax extenders” bill that retroactively puts into place the 3-year write-off period for horses purchased in 2022. Three-year depreciation benefits horse owners because some may not be eligible for Section 179 expensing due to the net income requirement and may choose to elect out of the 100% bonus depreciation. One of the main reasons to elect out of the bonus depreciation is to better match the deductions with corresponding income. A 3-year life (depreciated over a 4-year period) is more realistic for a horse’s racing career versus the 7-year life (depreciated over 8 years). Three-year depreciation is valuable to racehorse owners, especially racing partnerships with multiple passive owners, as it better aligns deductions with corresponding income opportunities on an annual basis. The extension of both 3-year depreciation and 100% bonus depreciation will give horse owners maximum flexibility in how to write off the cost of their horse.

 

Immigration

The H-2B non-immigrant visa program is intended to provide access to a temporary, seasonal, non-agricultural workforce for many industries such as nurseries, meatpacking and seafood processing plants when domestic workers are unavailable. The horse racing industry, and trainers in particular, rely on the H-2B program to fill various backside positions. Congress has set an annual cap of 66,000 H-2B visas. This allotment often falls short of satisfying employer demand. Congress has granted DHS and DOL the authority to address this shortfall by providing supplemental visas. While broader labor shortage issues in the U.S. economy should motivate Congress to tackle expansion and reform of the H-2B program, the political dynamics surrounding immigration make this unlikely – especially absent broader reforms of our immigration system including border security measures.

 

Sports Betting

It has been four years since the U.S. Supreme Court delivered a landmark decision to strike down the federal ban on sports gambling that prohibited betting on sports in most states. Since that ruling, which left the legality of sports gambling up to state-level government, many states have legalized sports betting or are in the process of doing it –36 states and Washington, D.C. have legalized sports betting. Congress, on the other hand, has been relatively silent on the issue, but for a couple of hearings and legislation that was introduced, but never advanced, back in 2018. No sports betting legislation has been introduced in the current Congress. However, should that change, NTRA is primed to take advantage of the opportunity and advocate for Thoroughbred racing.

 

HISA

HISA is the culmination of years of industry work to find a consensus approach to nationwide anti-doping and medication control as well as a national approach to racetrack safety. HISA calls for the creation of a private, independent, self-regulatory entity for the purposes of developing and implementing the horseracing anti-doping and medication control program and the racetrack safety program known as the Horseracing Integrity and Safety Authority (the “Authority”). The Federal Trade Commission (FTC) has oversight of the Authority.

HISA has implemented their Racetrack Safety program which went into effect on July 1, 2022. And finally, on Monday, May 22, HISA’s Anti-Doping and Medication Control (ADMC) Program once again took effect. With both programs implemented Thoroughbred racing for the first time has a national, uniform set of integrity and safety rules.

How can Federal lobbying help make our industry more competitive?

Primarily by seeking tax legislation that benefits industry stakeholder groups such as horse owners, breeders, racetracks, advance deposit wagering service providers and players but also by addressing select issues that directly impact the economics of racing, such as Internet wagering, immigration and matters that affect farmers, ranchers and other agricultural producers.

How does the NTRA lobby on Capitol Hill?

NTRA has recently opened a new office in Washington, D.C. to increase the association’s federal presence and advocacy efforts. The Washington, D.C. based team will lead the organization’s advocacy efforts with our nation’s policy makers.

How is the Legislative Action Campaign funded?

The Legislative Action Campaign raises funds through three programs: the ¼% Sales Check-off, NTRA Foal Program and Horseplayers’ Coalition membership. For the former, buyers, sellers and consignors may support the Campaign by pledging ¼ of one percent on the price of their horses sold at Keeneland, Fasig-Tipton, Ocala Breeders’ Sales Company, Barretts, Breeders’ Sales Company of Louisiana and the Washington Thoroughbred Breeders and Owners Association. Every $1,000 in a horse’s sale price equals $2.50 to the Campaign. Individuals who choose not to participate in auction sales may pledge contributions through the NTRA Foal Program. Others may support the Campaign by joining the Horseplayers’ Coalition, a group whose objective is to seek legislative and regulatory solutions to tax and business issues that impact pari-mutuel racetracks and their customers.

How do I participate?

Sellers, consignors and designated agents may “pre-commit” their pledge on sales entry forms. Buyers, and sellers who miss the deadline for pre-commitments, can pledge until the close of the sale billing. Owners and breeders may contribute through the Foal Program by regular mail. Horseplayers and other individuals may become members of the Horseplayers’ Coalition by joining the National Horseplayers Championship (NHC) Tour.

Who is eligible to participate?

The Campaign’s supporting programs are open to participation by individuals, corporate entities (partnerships, farms, etc.), U.S. citizens and foreign nationals.

How much can I contribute?

There is no limit on the amount that can be contributed.