If for some strange reason you get your news from places other than Jalopnik (why would you?), you may be outraged over the millions of dollars in federal assistance NASCAR is reportedly getting in, thanks to a rider that was tucked into the fiscal cliff bill.
The problem is, that's not the case at all. As we reported yesterday, the rider in the bill is not simply giving tax money to NASCAR. It is an extension of a tax write-off for motorsports facilities. This provision has been on the books for years and will be extended with the signing of the bill.
Let's take a few minutes to learn exactly what the deal is here, shall we?
What this tax incentive does is complicated, but essentially, it reduces the tax hit on motorsports facilities for new construction, as the Daytona Beach News-Journal so eloquently puts it. It lets race tracks depreciate the costs of things like capital improvements over a faster, seven year period, instead of a longer one, like 15 years. In the end, they pay less in taxes this way.
But here's the big thing that everyone has missed: it doesn't just affect NASCAR. Technically, it doesn't affect NASCAR, the stock car racing sanctioning body, at all. It affects the owners of the racetracks themselves. We let ourselves get suckered into that angle by calling them "NASCAR Tracks" in headline, which sounds sexy and is technically correct but isn't the most accurate way to describe it.
I asked a spokeswoman at the Circuit of the Americas in Austin if they would be impacted by this tax write-off. Here's what she told me:
COTA will be a beneficiary, but we did not actively pursue this extension. (The Automobile Competition Committee of 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. ACCUS serves as the interface between the international FIA organization and its member clubs in the United States.
So I called the Automobile Competition Committee of the United States and spoke with its president, Nick Craw. He told me that this tax perk affects all race tracks in the U.S., big and small. That means the Texas Motor Speedway, the Circuit of the Americas, drag strips, dirt tracks, and smaller facilities, he said. (The jury's out on whether it will affect the autocross course I set up in the parking lot of Bed, Bath & Beyond. Those orange cones should be a write-off, dammit!)
Here's the thing, though: This tax provision is nothing new. I also spoke with Charles Talbert, the director of investor and corporate communications at the International Speedway Corporation. They own a number of tracks, including Daytona and Watkins Glen.
Talbert told me that motorsports facilities have been allowed to have a seven-year recovery period for decades. It was finally codified into law by Congress in 2004, but it has required periodic extensions, which is what happened in the fiscal cliff bill. Talbert said they would like to see it become permanent.
As you all well know, there is more to racing in America than just NASCAR. But a lot of people don't, and so this rider in recent days has become known as "the NASCAR perk." I think this happened simply because there are a lot of people, including journalists, who automatically equate "racing" or "motorsports facilities" with NASCAR. And that's not entirely fair, because this tax write-off clearly affects more than just stock car racing.
And yes, it does mean less money in the pockets of the federal government if the measure did not exist. But it's nothing that hasn't been in place for a while.
Talbert got in touch with Yahoo! Sports and issued a statement that caused them to clarify the tax measure a little more, which to their credit, they did. NPR and other outlets also incorrectly reported that NASCAR, not the tracks themselves, will be the beneficiary of the tax incentive.
This concludes your Jalopnik lesson in American tax law for the day. Now if you'll excuse me, I have to go lie down until my headache goes away.