1/3/2013 6:00 PM ET|
Fiscal cliff deal has hidden NASCAR perk
A roughly $70 million tax break for racetracks is among the incentives packed into the bill's final version.
The fiscal cliff bill included an extension of the so-called NASCAR loophole that allows anyone who builds a racetrack to get a slight tax benefit by accelerating the depreciation on that property. In this case, racetracks can deduct more expenses and write down costs over seven years instead of the more typical 15- to 39-year period. It has been spelled out under section 168(i)(15) of the federal tax code since 2004.
This has cost about $43 million over the past two years, but racing and NASCAR supporters like Rep. Mike Thompson (D-Calif.) believe it's a necessary correction tax code that "treats one theme park differently from other theme parks."
International Speedway Corporation (ISC), which was created by NASCAR founder Bill France Sr. to build the racing league's tracks, insists that the loophole also discourages track builders from asking local governments for sales tax increases, hotel tax increases and other public funding typically used to pay for construction of sporting venues.
"We are an industry that regularly buys and replaces real property and regularly pays corporate taxes," ISC spokesman Charles Talbert wrote in an e-mail to Yahoo Sports. "We also use private money to finance our operations, choosing not to ask locals or business travelers to pay our freight."
It's that local element that made the raceway loophole an element of the fiscal cliff bill to begin with. Given the heated debate over this legislation, representatives were even more interested in what was in it for their district if they compromised on a few key points. As a result, the bill was reportedly stuffed with extras like a rum tax for Puerto Rico, a $9 billion tax break for banks and corporations, public transportation and subsidies for Hollywood films and incentives for using electric scooters.
The NASCAR bill stands out not only because it conjures images of colorful, sponsor-laden cars making left turns at high speed, but because early reports put the cost of the break at $70 million in lost tax revenue for a one-year extension. According to estimates by the Joint Committee on Taxation reported by Huffington Post, however, the loophole will cost taxpayers $46 million this year and another $95 million through 2017.
Though Talbert says the industry is just trying to preserve a tax law it's come to depend upon, it's also spending a whole lot of cash and political clout to do so. International Speedway Corp alone has spent more than $1.1 million lobbying Congress since 2008, according to lobbying disclosure forms. NASCAR spent more than $300,000 during that span on lobbying efforts, which included a push to "make permanent the depreciation classification."
More recently, NASCAR officials, including chief executive Brian France and president Mike Helton, helped raise funds for Republican nominee Mitt Romney during his unsuccessful bid for the presidency last year.
Is all the political wrangling worth it for the racing industry? Absolutely. Building a racetrack is an expensive undertaking, with International Speedway's Chicagoland Speedway in Joliet, Ill., costing $130 million to build before it opened in 2001. The 375-acre Circuit of the Americas Formula One racetrack in Austin, Texas, cost $400 million to build and just opened this year.
More on Money Now
Copyright © 2014 Microsoft. All rights reserved.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
These hot movers could rise by double digits in coming months.
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'