Jul 16, 2014, 5:37 PM EDT
The oftentimes controversial subject of tax breaks to U.S. auto racetracks is once again in the news.
According to a report by The Hill.com, racetrack owners are back on the defensive about revenue-saving tax breaks that, while helping out many smaller tracks, are viewed by some legislators as unfair and unnecessary.
The so-called Motorsports Tax Break, which has been in effect since 2004, allows track owners a variety of breaks, including a shorter depreciation schedule upon things such as major equipment purchases and significant facility improvements.
Much of those types of tax breaks expired at the end of last year when Congress failed to pass an extension. The issue is back in the forefront of legislators, who are increasingly butting heads with fellow politicians who want to do away with the break, also known as “the extender.”
That’s why most motorsports series – including NASCAR, IndyCar, NHRA and IMSA – are reportedly stepping up lobbying efforts to get Congress to reconsider and extend the tax break.
“It’s an asterisk in the extenders, yet it gets all this attention, mischaracterized,” International Speedway Corporation president John Saunders told TheHill.com.
Some of the motorsports-related tax breaks, as well as others for disparate entities such as Puerto Rican rum production and thoroughbred horse racing, are expected to be at least partly restored by year’s end, according to TheHill’s Bernie Becker.
But tax breaks aren’t just for major companies such as ISC, Speedway Motorsports Inc. and others. Small standalone racetracks and drag strips also receive tax benefits due to the nature of their businesses, many which are predicated upon things out of their control such as weather.
Many of those same tracks – it’s estimated there’s about 1,200 in the U.S. – can write off improvement costs over as much as seven years. In turn, that allows them to make even further improvements to their facilities to keep them technologically advanced and competitive with other similar tracks in their respective regions.
The U.S. Senate is preparing to float a proposal that would further extend the existing write-off schedule for another two years. There is also an option to extend the breaks for a decade at a cost of roughly $71 million, part of a larger $85 billion package to restore numerous other tax breaks to various industries that have also expired, according to TheHill.com.
Two members of Congressional tax-writing committees – Sen. Debbie Stabenow (D-Mich.) and Rep. Tom Reed (R-N.Y.) – are seeking to make permanent the tax breaks for racetracks.
Stabenow told TheHill.com that Michigan International Speedway produces over $400 million annually in economic impact to the surrounding region and state.
“It’s a matter of just talking about how this is an economic engine for many communities around the country,” Stabenow said.
Michigan Republican and U.S. representative Dave Camp, who is chairman of the House Ways and Means Committee, is mixed in his viewpoint on the tax breaks. He has lobbied fellow Congressmen in recent months to either reinstate the temporary tax breaks or do away with them completely.
Curiously enough, however, Camp has not indicated that he would like to make the temporary tax breaks permanent.
Follow me @JerryBonkowski
- Hamilton tames wet conditions to grab pole in Malaysia 0
- WATCH LIVE: Malaysian GP qualifying at 5a ET on NBCSN and Live Extra 0
- Rosberg closes out Malaysian GP practice fastest 0
- NHRA: Rain washes out Friday’s first two rounds of qualifying four 4-Wide Nationals 2
- The Equalization Conundrum: Should F1 put sport to one side in favor of ‘the show’? 5
- Practice setbacks leave Hamilton “quite a bit off” in Malaysia (VIDEO) 2
- Verizon IndyCar Series 2015 preseason content roundup 0