Congress passes spending bill that includes HISA, extends racehorse tax depreciation and visa program

Posted: Dec. 22, 2020

The United States House of Representatives and Senate the evening of Dec. 21 passed a $2.3 trillion spending package includes the Horseracing Integrity and Safety Act of 2020 and an extension of a racehorse tax depreciation schedule.

Early in the morning of Dec. 22, federal lawmakers passed the 5,000-page omnibus bill, which includes a $900 billion COVID-19 relief package that includes provisions that could benefit the horse racing and breeding industry. The programs are similar to those that were established in the spring of 2020 to offer financial aid to individuals and businesses impacted by the virus.

The omnibus spending package covers the remainder of the current federal fiscal year. HISA, which would create an authority to oversee medication policies and drug testing in Thoroughbred racing as well as establish standards for health and safety, will take effect July 1, 2022. More information on the legislation is available here.

President Donald Trump signed the legislation Dec. 27.

The National Thoroughbred Racing Association reported that the spending package includes three-year tax depreciation for all racehorses through 2021. Uniform three-year racehorse depreciation was among numerous tax provisions across many industries that were set to expire at the end of 2020.

The provision extends the three-year depreciation schedule for all racehorses through 2021 and allows taxpayers to depreciate, on a three-year schedule, racehorses less than 24 months of age when purchased and placed into service. In the past, racehorses of that age were depreciated on a seven-year schedule.

The accelerated schedule better reflects the length of a typical racehorse’s career and is more equitable for owners, said the NTRA, which noted that maintaining the three-year recovery period for racehorse purchases has been a top legislative priority since 2008.

The NTRA also said a series of current H-2B visa program provisions are set to continue as part of omnibus legislation. H-2B visa program policies set to continue include:

• Authority for the Department of Homeland Security, in consultation with the Department of Labor, to increase the H-2B cap for fiscal year 2021 by up to about 69,000 visas if it determines that the needs of seasonal businesses cannot be met with U.S. workers;
• Continuation of the use of private wage surveys for prevailing wage determinations;
• A prohibition against DOL enforcing the corresponding employment and three-quarters guarantee provisions of its H-2B regulations relating to total work hours; and
• Provisions extending the maximum employment season for up to 10 months as opposed the nine-months in current DOL regulations.

The H-2B visa guest worker program is a nonimmigrant visa program used by many industries that need temporary non-agricultural help when domestic workers are unavailable. For the horseracing industry, racehorse trainers rely heavily on the H-2B program to fill various backstretch positions. Demand for H-2B visas often exceeds their availability and the cap level is quickly reached, leaving employers without sufficient help.

The NTRA, through its involvement with the H-2B Workforce Coalition, supports efforts for comprehensive reform of the guest worker visa program.

Regarding COVID-19, the NTRA said eligible racetracks and farms can again participate in the second round of the Paycheck Protection Program. The new provisions include:

• Expanded PPP loan terms that include new eligibility for horse and farm owners without employees operating as sole proprietors or via single member LLCs;
• New PPP eligibility for qualifying 501(c)(6) organizations with less than 300 employees;
• Additional eligible expenses that now also include software, human resources, accounting, and personal protective equipment for those who have not yet had PPP loans forgiven;
• A second draw PPP loan of up to $2 million that now is available for qualifying businesses with at least a 25% reduction in gross receipts;
• Extension of employer tax credits for paid sick and family leave and employee retention into 2021; and
• Full deductibility of meals from restaurants during 2021 and 2022.