Sen. Debbie Stabenow, D-Mich., is teaming with Senate Appropriations Chairman Thad Cochran, R-Miss., and other senior Republicans in pressing for a permanent extension of faster tax write-offs for operators of motor racetracks, including 29 venues used for NASCAR events.
A new Stabenow bill (S 1624) and a similar House measure (HR 1549) by Rep. Tom Reed, R-N.Y., would make permanent the accelerated seven-year time frame for writing off improvements to racetracks. The incentive was renewed in the two-year tax break extension (PL 113-295) that expired at the end of last year.
In coming weeks, Stabenow has signaled that she and other lawmakers will press to add her proposal in a tax overhaul plan and will insist on at least a temporary extension of the sweetener as part of a possible year-end tax break extension package. She and other supporters have emphasized the importance of faster write-offs to NASCAR race sites in their home states, including Michigan International Speedway.
Other supporters include Senate Intelligence Chairman Richard M. Burr, R-N.C.; Sen. Roger Wicker, R-Miss., chairman of the National Republican Senatorial Committee; and Rep. Debbie Wasserman Schultz, chairman of the Democratic National Committee.
Mark Rosentraub, a sports management professor at the University of Michigan, said racetracks have become meccas for summer music festivals, automobile and motorcycle shows and other popular events. “They attract valuable hospitality industry dollars. They play an important role in communities where they are located,” Rosentraub said.
The racetrack tax incentive first was enacted as part of the 2004 corporate tax law (PL 108-357) and was designed to supersede an Internal Revenue Service ruling that improvements should be written off over much longer timetables, similar to renovations and additions to other non-residential business property. Without congressional action, track owners would be faced with much longer time frames for write-offs: 15 years for specialized land improvements and 39 years for commercial buildings.
Proponents argue that eliminating faster write-offs would stifle investment in racetracks and potentially threaten their role as economic anchors.
But critics such as Steve Ellis, vice president of the nonprofit watchdog group Taxpayers for Common Sense, argue for ending the tax break, which they say is mainly beneficial to a pair of companies that operate about two-thirds of NASCAR tracks: North Carolina-based Speedway Motorsports Inc. and Florida-based International Speedway Corp.
“We don’t think it should be added to permanent law. When we are talking about comprehensive tax reform and eliminating tax expenditures, this should be on the list for elimination,” Ellis said.
Dan Houser, chief financial officer for International Speedway, said racetrack operators needed the lapsed incentive renewed in order to keep their facilities in top condition and to keep pace with amusement parks, which already have permanent seven-year write-offs.
“It’s sexy to talk about NASCAR. This has nothing to do with NASCAR. It benefits the whole industry,” Houser said. “Walt Disney has a similar treatment for its amusement parks.”
Houser and other proponents argue that the shorter duration of write-offs matches the useful life of investments because of changes in technology, consumer needs and safety requirements for the public and for the drivers.