United States Representative Claudia Tenney (R-NY) last week reintroduced the bipartisan, "Motorsports Fairness and Permanency Act" (H.R. 2231), a bill that would permanently establish an important tax incentive that helps create a more sustainable economic landscape for race tracks across the nation. 

The SEMA- and PRI-supported bill would permanently allow motorsports entertainment complexes to depreciate their investments over a seven-year period. The incentive, along with the Tax Cuts and Jobs Act of 2017, is otherwise set to expire on December 31, 2025. Without congressional action, race tracks' depreciation period would revert to 29 years. This is why making the incentive permanent would provide track owners with important certainty for making long-term investments. 

"Race tracks across America deserve certainty in order to make long-term investments for the betterment of their business," SEMA President and CEO Mike Spagnola previously stated in support of the legislation. "There are more than 1,500 race tracks across this country, many of them are small businesses. The foundation of their enterprise relies on capital improvements and ensuring that their facilities are welcoming to all. Revising language in our tax code is a vital step to buoy this industry for years to come." 

The Motorsports Fairness and Permanency Act is cosponsored by U.S. Representatives Mike Thompson (D-CA), Richard Hudson (R-NC), Terri Sewell (D-AL), Rudy Yakym (R-IN) and Debbie Wasserman Schultz (D-FL).

Background on the Motorsports Fairness and Permanency Act

The Federal Tax code defines a "motorsports entertainment complex" to mean a race track facility that "(i) is permanently situated on land, and (ii) during the 36-month period following the asset being placed in service, hosts one 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.  

For additional information, contact Juan Mejia, SEMA senior manager, federal government affairs, at juanm@sema.org.  

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