A budget reconciliation bill under consideration by Senate and House Republicans, dubbed President Trump’s “Big Beautiful Bill,” could negatively impact the Thoroughbred industry by removing favorable tax provisions. While the bill would reinstate 100% bonus depreciation on qualifying purchases, it also caps the amount of business losses individuals can deduct annually to $300,000 (or $600,000 for couples). This limitation would affect many in the horse industry who fund operations through investment income rather than business income, significantly reducing their ability to claim losses and negating the benefit of bonus depreciation. The changes could lead to reduced investment in horses, with both large and small owners potentially buying fewer horses or exiting the business altogether.
Industry advocates, including the National Thoroughbred Racing Association and tax experts, are actively working to amend the bill’s language to protect the industry, exploring options such as expanding the definition of farmland to include horse racing operations. Key lawmakers like Senator Mitch McConnell and Congressman Andy Barr are involved in these efforts. The bill’s provisions are complex and primarily aimed at raising revenue, with the effective date varying between 2026 and 2027 depending on the bill version. Stakeholders are urged to contact elected officials to raise awareness of the bill’s potential harm to the Thoroughbred industry amid ongoing legislative negotiations.
