Earlier this week, the United States congress passed a much-discussed Fiscal Cliff Resolution, an 11th-hour move that delayed (at least temporarily) widespread tax increases for the middle class and monstrous spending cuts. The resolution was also riddled with a number of otherwise unrelated fiscal appropriations, one of which will allow the owners of motorsports facilities to reduce their tax burden over the next two years by approximately $70 million.
The “NASCAR Provision,” as it was erroneously labeled by many members of the mainstream media, is nothing new. It is simply the latest extension of a program that has been in existence for many years.
Under the provision, track operators will be allowed to depreciate the cost of facility upgrades, construction, remodeling and infrastructure improvements over a seven-year period, rather than over the lifetime of the facility. The legislation keeps motorsports facilities in the same category as baseball, football, basketball and hockey arenas, as well as amusement parks; all of which benefitted from a similar provision for decades before motorsports facilities were finally included as part of the Job Creation Act of 2004. The provision has been extended multiple times over the years, most recently in 2011.
In stark contrast to what taxpayer-funded National Public Radio and other media outlets reported this week, the United States government is not “giving” $70 million to NASCAR. In fact, they’re not “giving” anything, to anyone.
In his article, 'Rum Cliff' And Other Close Shaves In The Tax, Spending Deal,” NPR’s Scott Neuman erroneously wrote, “Section 312 of the bill extends a provision that places National Association of Stock Car Auto Racing tracks in the same category as amusement parks for tax purposes. Estimates are that the tax break is worth $70 million to Daytona Beach, Fla.-based NASCAR."
That statement is patently untrue, since NASCAR does not currently own or operate any race tracks, and never has. What the provision will do is allow permanent motorsports venues to depreciate certain investments over a shorter period of time, saving them approximately $70 million less tax revenue in the next two years and $34 million between now and 2019. A number of tracks that host NASCAR Sprint Cup, Nationwide and Camping World Truck Series events will absolutely benefit from this provision. So will literally thousands of drag strips, dirt tracks, road courses and short tracks from coast to coast.
But for the record, when that seven-year period expires, track owners will actually pay approximately $25 million in additional taxes between 2020 and 2022. In fact, sources say the same amount of tax revenue will be generated, but over a longer period of time.
That’s not nearly as scandalous as some ill-informed members of the media would like you to believe, now is it?