Issues

Tax Extender Legislation

 

The major issue the industry is facing right now is extending our 7-year tax depreciation classification. As way of background, for decades, the motorsports industry has relied on a tax depreciation classification that provides for 7-year depreciation of motorsports facilities. In about 2000, the IRS started questioning this tax treatment despite having audited tracks several times throughout the years without raising the issue. In 2004, the industry was successful in securing legislative relief with Congress that affirmed the 7-year treatment. However because of revenue constraints, the measure was enacted only through the end of 2007.

 

During the 110th Congress, we were able to secure an extender of our provision through December 31, 2009. We have reintroduced the permanency bill in the House. H.R. 1974 the Motorsports Fairness and Permanency Act of 2009 and plan on introducing a Senate bill shortly.  Concurrently, we are seeking a one or two-year extension of the provision since it is unlikely Congress will pass the permanency bills this year due to the tough budget constraints.

 

The message to the Hill is simple -- if Congress does not extend (or make permanent) the 7-year provision (to the over 900 motorsports facilities across the country), the level of capital investment by track operators will be significantly reduced and negatively impact the communities in which we operate. Motorsports entertainment facilities have tremendous economic and job creation impact, both regionally and nationally -- which is critical in the current economic climate.