Motorsports Fairness and Permanency Act

Currently, Congress has authorized the accelerated depreciation of racetracks through December 31, 2025, although this tax incentive must be made permanent to provide certainty to tracks making long-term investments.  

The Federal Tax code defines a “motorsports entertainment complex” to mean a racetrack facility that “(i) is permanently situated on land, and (ii) during the 36-month period following the asset being placed in service, hosts 1 or more racing events for automobiles (of any type), trucks, or motorcycles which are open to the public for the price of admission.” 

Accelerated depreciation of investments in a motorsports entertainment complex applies to capital expenditures in a facility’s ticket booths, race track surfaces, suites and hospitality facilities, grandstands and viewing structures, props, walls, facilities that support the delivery of entertainment services, other special-purpose structures, facades, shop interiors, and buildings in addition to support facilities (including food and beverage retailing, souvenir vending, and other non-lodging accommodations), parking lots, sidewalks, bridges, fences, and landscaping. The tax incentive does not, however, apply to transportation equipment, administrative services assets, warehouses, administrative buildings, hotels, or motels. 

SEMA supports S. 2462/H.R. 2696, the “Motorsports Fairness and Permanency Act of 2023,” a bill to amend the Federal Tax Code to make permanent the seven-year recovery period for investments in motorsports entertainment complexes.

U.S. Senator Mark Warner’s (D-VA) bill, S. 2462, has five bipartisan cosponsors and awaits consideration in the Senate Finance Committee. U.S. Representative Claudia Tenney’s (R-NY) bill, H.R. 2696, has 16 bipartisan cosponsors and awaits consideration in the House Ways and Means Committee.

Key Points

• There are over 1,500 racetracks across the U.S., which provide affordable, family-friendly entertainment.
• Racetracks play an important role in providing jobs and a sense of community in towns throughout the U.S.
• The majority of motorsports facilities are small businesses that employ many hard-working Americans and provide positive economic benefits to the surrounding communities they serve.
• Congress should make this provision permanent so all owners can make necessary investments in their tracks and property to ensure that racing continues to be available to enthusiasts nationwide.