Track's tax: 'fiscal cliff' break aids N.H. Motor Speedway.
The owner of New Hampshire Motor Speedway will get a tax break on future capital investments at the Loudon track as part of what has been dubbed a $70 million extension of the "NASCAR tax break," which is included in the deal Congress forged around New Year's to avoid going off the so-called "fiscal cliff."
The tax break has been blasted by critics, who include it with other fiscal cliff tax breaks that help Puerto Rican rum makers, Hollywood movie producers and Wall Street bankers.
But Jerry Gappens, executive vice president of NHMS, said the break "is an economic stimulus to put more money back in our facilities. This is not some obscene tax break. It's working the way it is designed to, providing an incentive to invest in the local economy."
The speedway break-first passed by Congress during the George W. Bush administration--includes a seven-year depreciation provision for new motorsports construction, as opposed to taking it over the life of the facility, which can range from 15 to 39 years.
Since then, Congress has repeatedly extended the tax break. The last extension from Dec. 31, 2011, to Dec. 31, 2013--was included in the American Taxpayer Relief Act of 2012, passed during the first days of 2013 in a desperate attempt to avert massive automatic budget cuts and tax increases--the self-imposed "fiscal cliff" if Congress didn't come up with a deal to curb the deficit.
Speedway Motorsports Inc., the Charlotte, N.C.-based company that bought the Loudon track for $340 million in 2008, has used the tax break for some $15 million in capital improvements at Loudon, from upgraded bathrooms to a new scoreboard, said Gappens.
The $2.1 million spent last year, for instance, enabled Speedway Motorsports to double its write-off from $150,000 a year to $300,000 a year, Gappens said.
A write-off is a reduction in the amount being taxed-not a reduction in the tax itself.
It's difficult to estimate how much that would mean in tax savings, but in general such a break could roughly translate into a $50,000 tax reduction for each $1 million spent in capital improvements by companies in the top tax bracket, estimated Steve Feinberg, a CPA and owner of Appletree Business Services in Londonderry.
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|Title Annotation:||New Hampshire Motor Speedway|
|Publication:||New Hampshire Business Review|
|Date:||Jan 11, 2013|
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