Hot News
for your iPhone
for your iPad
Go to our forums to discuss this news
DATE News (chronologically)
track news
Austin racetrack gets ‘fiscal cliff’ tax break
Circuit of the Americas, the new racetrack in Southeast Austin, could benefit from a tax break extended in the recent “fiscal cliff” negotiations.

A provision that detractors have nicknamed the “NASCAR loophole” allows auto race tracks to accelerate their depreciation schedule and possibly pay lower federal taxes as a result. The recent legislation extends the benefit to tracks placed in service after Dec. 31, 2011. The Austin circuit held its first auto race, the United States Formula One Grand Prix, in November.

“We are pleased with the extension of the tax provision which applies to the motorsports industry,” circuit spokeswoman Ali Putnam said. “This provision allows racetrack facilities to receive a small tax benefit through accelerated depreciation. The extender permits a quicker depreciation of capital asset investments in seven years, as opposed to a longer period, for motorsports facilities.”

Putnam added, “COTA will be a beneficiary, but we did not actively pursue this extension. The (Automobile Competition Committee for the United States), of which we are not a member but work with for our world championship series, actively lobbied for this extension and kept us apprised of the progress.”

Putnam didn’t have an estimate on how much the circuit would save with the tax break.

Nick Craw — president of the Automobile Competition Committee for the United States and Senate president of FIA, the world motor sports governing body — stressed that the provision wasn’t a NASCAR exemption and was developed by the National Motorsports Council to benefit all motor sports facilities. Craw was on hand for the circuit’s inaugural Formula One race in November, when he presented the third-place trophy to Ferrari driver Fernando Alonso.

“This is a job creator,” Craw said in an email to the American-Statesman. “Only the IRS knows how many have taken advantage of the provision.”

The Huffington Post reported, “According to estimates by the Joint Committee on Taxation, the so-called NASCAR loophole will cost taxpayers $46 million this year and an additional $95 million through 2017.”

Craw said he suspected such numbers were “wildly inflated.”

Auto racing tracks have been using the accelerated depreciation schedule for more than a decade, as have entertainment theme parks. In 2004 , after some questioning from the Internal Revenue Service, the tax break specifically for automobile race tracks was passed into law. Without it, a depreciation schedule for track construction might be 15 years or more.

The Austin circuit, which some industry experts have called the best in the U.S., has received other government benefits.

In December, Texas Comptroller Susan Combs approved payment of $29.3 million from the state’s Major Events Trust fund to the circuit in connection with its Formula One race. That grand prix attracted more than 117,000 fans on race day, making it the largest sporting event in Austin’s history. statesman.com

Hot News Archives
2000 2001 2002 2003

Search Hot News
Search Help
AutoRacing1 Inc. BBB Business Review