The One Big Beautiful Bill Act, passed by Congress July 3 and expected to be signed into law by President Trump, makes permanent 100% bonus depreciation, an important incentive for Thoroughbred breeders and owners, according to the National Thoroughbred Racing Association.
The 100% bonus depreciation was part of the Tax Cuts and Jobs Act of 2017, signed into law during the first Trump administration. Originally, this provision included a phase-out schedule that made bonus depreciation 40% this year, 20% in 2026, and completely phased out by 2027. Now, it will stay at 100%, retroactive to Jan. 20, 2025.
The NTRA said that thanks to the efforts of many, including Rep. Andy Barr, a Kentucky Republican, problematic language changing the nature of the excess business loss carryover was removed in the final version of the bill. In addition to Barr, NTRA president and CEO Tom Rooney credited Senate Majority Leader John Thune, a South Dakota Republican, and former Senate Majority Leader Mitch McConnell, a Kentucky Republican, with ensuring the horse industry was represented.
"Thanks to the leadership of Senators Thune and McConnell, and particularly the efforts spearheaded by Congressman Barr, Thoroughbred racing will come away with significant gains from the One Big Beautiful Bill. It can't be overstated how important permanent 100% bonus depreciation is to the sport," Rooney said. "Equally as important was getting the language changing section 461(l) removed. Those changes to the excess business loss carryover would have wiped out many gains that those in the horse industry would have seen with 100% bonus depreciation. I'm grateful for all of the hard work that the congressman put into getting this done for Thoroughbred breeding and racing."
The NTRA reports that Barr led the way on getting the language removed, ensuring that the separate provision does not take away the benefits of 100% bonus depreciation.
"By making bonus depreciation permanent and protecting small-business loss carryovers, OBBBA delivers a targeted but critical boost for our signature horse industry," Barr said. "The Thoroughbred horse racing industry is a special part of Kentucky, and this bill ensures it will thrive for generations to come."
One concern is that the bill limits to 90% of the amount of gambling losses that can be claimed against winnings. This would take effect for taxable years beginning Jan. 1, 2026.
The NTRA noted in it Thursday release: "While there are many victories for the horse racing industry in the OBBBA, there is still work to be done to offset some losses by horseplayers in their ability to deduct tax losses. The NTRA is committed to working on that fix moving forward."
