Bill would create equine-industry account, tax credit to offset federal HISA fees, lawmakers hear testimony

Senate Bill 5,610 would create a Washington Equine Industry Federal Regulatory Account to help the state’s horse-racing industry pay federal fees under the Horse Racing Integrity and Safety Act (HISA) and would establish a tax credit to offset payments to HISA or the Washington Horse Racing Commission. The account would be funded by sales and use tax receipts on a defined set of equine-related goods and services, subject to an annual transfer cap of $1.5 million (adjustable for inflation and federal fee levels).

Senator Claudia Kauffman, sponsor of SB 5,610, said the bill aims to provide targeted relief for a sector that contributes to local economies and faces rising federal compliance costs. "This bill will provide targeted relief and sustainable funding by establishing a tax credit to offset fees paid to the federal HISA or the Washington Horse Racing Commission," Kauffman said.

Committee staff summarized the bill: the Department of Revenue would transfer up to $1.5 million annually beginning July 1, 2026, into the new account; qualifying sales and use taxes include equine sales, feed, tack, bedding, prescriptions and other taxable sales directly related to equine ownership and riding. The commission would provide verification to the Department of Revenue for tax-credit claims; a tax-credit claim would not require an application but would require filing returns and forms.

Emerald Downs officials, trainers and stable workers testified in support. Phil Ziegler, president of Emerald Downs, described the federal HISA fee assessment that could raise Washington’s assessed costs substantially and said the track and industry lack sufficient revenue to absorb the increase without risking closures or reduced safety investments. "If a state doesn't pay that money, then the costs get passed along to the industry, to the track, to the owners, to the trainers, to the jockeys," Ziegler said.

Amanda Benton of the Horse Racing Commission said the commission expects to vote on the bill at its next meeting and reiterated the commission’s projection of a negative fund balance within 15 months absent supplemental revenues. Witnesses described the industry’s economic footprint, workforce and ancillary businesses that would be affected by track closures.

The hearing was informational. Committee members asked staff clarifying questions about the tax base (the bill references specific equine items) and the cap on transfers to the new fund; no committee vote was taken at the hearing.