By TIM THORNBERRY
Kentucky Correspondent

LOUISVILLE, Ky. — Kentucky’s horse industry is big business. Last year, the sector saw nearly $800 million in cash receipts to its credit. That number however, has fallen over the last few years: In 2006 and 2007, horses topped agricultural commodities with more than $1 billion in receipts.

The economy has had much to do with the decline, but so has the lack of tax incentives especially when it comes to the Thoroughbred side of the business, prompting many owners to take their operations to other states.

For instance, a cattle producer doesn’t have to pay sales tax on feed while a horse owner does. It is exactly those kinds of issues that prompted Kentucky Farm Bureau’s equine advisory committee to make a recommendation which could be presented to their delegates at the organization’s annual meeting. The proposal would urge the General Assembly to work toward legislation that will benefit the equine industry.

Alex Barnett who serves as a KFB director and chairman of the committee said it’s time to get Kentucky on an even-playing field.
“A lot of our better horses are going out of the state to be bred because of breeding incentives in neighboring states and the equine committee just feels we need to remain the horse capital of the world,” he said. “In order to do that, we’re going to have to help the horse farms.”

That help could come in the form of a tax break similar to what other farms receive when it comes to input costs. Barnett said the horse farms aren’t viewed as agriculture enterprises and don’t get to write those expenses off on their taxes.

“That’s one thing that could help equine farmers,” added Barnett. “It is a type of farming and not a hobby.”

Legislation to nullify the tax situation has come before the Kentucky General Assembly in the past, but has yet to be passed and at the moment, nothing is pending for the upcoming session.
Barnett said that while no equine-related legislation is currently being looked at, the recommendation spells out that KFB would support any avenue to help the industry to remain competitive.
“It would give KFB the opportunity to lobby for anything that helps the equine industry,” said Barnett.

That wording set off a slew of innuendos that the company might lends its support to the idea of expanding gambling. So far, the gaming issue has been one of the few incentives offered at the state level; one that has been beaten back each time it has been presented.

Jeff Harper, KFB director of public affairs said that at the heart of the recommendation is the desire to help horse owners, a group KFB has always supported.

“In the past, there has been legislation introduced to remove the disadvantage that horse farms have in terms of sales tax as other farms in the commonwealth have,” he said. “Agricultural inputs are exempt from Kentucky’s six percent sales tax, however horse farms are not. We have in the past, and unless our policy changes, which I don’t see, we will continue to support that to put the horse farms on equal footing with the rest of agriculture in terms of the sales tax,” he said. “KFB currently does not have a position for or against any type of expanded gaming in the commonwealth. The equine advisory committee, as all of our advisory committees, submits their recommendations to our resolutions committee.”

Harper added that the 25-member resolutions committee, elected by their FB districts, will take three days to look at these recommendations and produce a document to present to the agency’s delegates at their annual conference for consideration.
He noted that this is an issue to help and support the horse industry including the Thoroughbred sector as well as all other breeds, something in which KFB has done in their existing policy including supporting the projects of the Kentucky Equine Education Project (KEEP) and the Kentucky Horse Council (KHC.)

“At KFB, we are keenly aware that the equine industry contributes $780 million to Kentucky’s economy and we also understand that the industry in its entirety is a vital contributor to the state’s agriculture infrastructure,” said Harper. “We’re going to work with the equine industry in any way that we can in which our policy supports, as we do with all commodity groups.”

KHC Board President Madelyn Millard is manager of Waterwild Farm in Fayette County and sees the importance of all horse breeds to Kentucky on a daily basis.

She said it is important to have the support of agencies like KFB as it brings to light the fact that there are more than just racehorses in Kentucky.

“It helps to educate people that the equine industry is more than the racing component. Certainly, the fact that Kentucky is the only state in the U.S. to host the World Equestrian Games (WEG) shows we are a leader in the equine world and KFB brings that out front,” she said.

Millard also said that the industry as a whole has suffered of late and what affects the racing community, affects every part of the industry because of its dependency on other agricultural entities such as hay and grain producers, and fence builders.

She added that while there is a realization that the Thoroughbred industry has suffered, the success of the WEG has put the state in a position to bring in more non-race type horses because of the world class facilities that were built at the Kentucky Horse Park specifically for the games.

KFB’s annual conference will take place in December while the next General Assembly convenes after the first of the year.