Ontario Racing Calls for Tax Law Changes
Ontario's horse racing industry is already struggling with high inflation and stagnant purses, but participants from both the Thoroughbred and Standardbred industries say outdated and restrictive tax laws threaten the future of an industry that supports 23,000 full-time equivalent jobs in the province.
They say current Canadian tax laws are a disincentive for people to buy racehorses in Canada, especially when compared to recent United States tax law changes that have already proven to encourage the purchase of racehorses. A decline in Canadian buyers further hurts the Ontario horse breeders that are the lifeblood of one of the province's largest agricultural sectors.
In Canada, Section 31 of the Income Tax Act states that a person that owns horses as a hobby business may only write off a maximum of $17,500 of losses annually in the horse racing business against their main business. In the U.S., President Donald Trump's "Big Beautiful Bill," which was signed into law this summer, allows horse owners to write off 100% of bonus depreciation for horse losses. We'll spare you the accounting details, but if you want to read more about them, you can do so at the National Thoroughbred Racing Association.
Many media stories show 100% bonus depreciation has already had a huge positive impact on Thoroughbred yearling sales in Saratoga and Lexington—both of which shattered sales records.
"It seems like that whatever tax change they have made in the United States has been very successful as far as parting people from their wallets," said Glenn Sikura, owner of Hill 'n' Dale's Thoroughbred breeding operation in King City, Ontario. "Those horses in Saratoga were really nice horses, but, wow, the average was through the roof."
The bottom line is this: Horse owners in the United States have a massive tax incentive to invest in racehorses. In Canada, the tax laws are driving investment away from Ontario's horse racing industry.
Dave Briggs
Ontario Racing
Enjoying Workout Coverage
It is a great time of year with the approach of the Breeders' Cup. I enjoy the Breakfast at the Breeders' Cup coverage that FanDuel TV provides.
They show the majestic horses train and prepare for the main event on Friday and Saturday. The analysts are very informative and do great interviews with the horse industry people. From Friday, Oct. 24, until Thursday, Oct. 30, my mornings will be memorable with Breakfast and horses.
Michael Fenrich
Malverne, N.Y.
