Battle to extend racetrack tax breaks heats up again

Leave a comment

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

F1 2017 driver review: Nico Hulkenberg

Getty Images
Leave a comment

Nico Hulkenberg

Team: Renault
Car No.: 27
Races: 20
Wins: 0
Podiums: 0
Best Finish: P6 (Spain, Great Britain, Belgium, Abu Dhabi)
Pole Positions: 0
Fastest Laps: 0
Points: 43
Championship Position: 10th

Expectations were hard to peg for Renault heading into its second full season back in F1 with a factory team, but Nico Hulkenberg was surely expected to be the man spearheading its charge.

With teammate Jolyon Palmer severely underperforming, Hulkenberg did exactly that, bringing home all but 14 of the team’s points in the final standings. However, consistency was never something he truly found.

Many of Renault’s issues were down to reliability issues, sidelining Hulkenberg for six races – four coming in a five-race stint from Singapore to Mexico – yet he only scored points in consecutive races on three occasions.

When Hulkenberg and Renault were on form, they proved to be a potent combination, often topping the midfield fight and even looking faster than Force India come the end of the season. His run to sixth at the final race in Abu Dhabi was crucial for the constructors’ championship as Renault jumped Toro Rosso, securing an extra slice of prize money in the process.

But for a driver who was so often tipped as being a future star in F1, Hulkenberg still has a lot to prove. Renault is set to offer a good platform for the German moving forward with factory support, yet if he cannot beat new teammate Carlos Sainz Jr. through 2018, concerns will surely be raised.

Season High: Charging to sixth in Abu Dhabi despite a penalty.

Season Low: A tough run to 16th in Malaysia.