Kentucky bill would give horse owners tax relief

A state legislative committee on Wednesday approved a bill that would exempt horse owners in Kentucky from a handful of state taxes related to equine care and farm upkeep.

The bill, the subject of lobbying by equine interests, would enable horse owners to avoid paying the state’s 6 percent sales tax on feed, fertilizer, chemicals, machinery, water, fuels, and other items “used in the production of equines,” according to the bill. The cost of the tax exemptions to the state’s general budget was estimated at $34.6 million annually.

A proposed budget released by Gov. Matt Bevin, a Republican, three weeks ago called for deep cuts in spending by most state agencies. For that reason, racing lobbyists are realistic about the bill’s chances this year, said Chauncy Morris, the executive director of the Kentucky Thoroughbred Association, which lobbied for the bill.

“This is a pretty lean budget year, but we’d like to position the industry to have an honest conversation about tax relief and tax reform in future legislative sessions,” Morris said.

Kentucky already grants similar tax exemptions for livestock businesses. Horse lobbyists have argued that the tax exemptions would bring parity to the state’s tax code.

The bill is scheduled to be heard next in the House Appropriations and Revenue Committee.