Fiscal Cliff Agreement Saves NA$CAR $70M in Taxes

[Pacecar]

http://racingwithrich.com/?p=1992

 

NASCAR Doesn’t Need Sellouts When the Government Hands Them $70 Million

By admin | January 2, 2013

 

By Richard Allen

So you think it’s a big deal that numerous seats are empty at most tracks when NASCAR contests its races? Well, in an odd piece of news related to government officials in Washington playing political poker with the country’s budget, the Daytona Beach, Florida based stock car racing organization will receive $70 million as part of the “fiscal cliff” agreement.

According to a report from ABC News, the money comes as an extension of a “seven-year cost recovery period for certain motorsports racing track facilities.”

The $70 million amount is an estimate of lost tax revenue if current tax credits, which are scheduled to expire, are extended for a year. In other words, had the deal not been reached, NASCAR tracks would have owed $70 million more in taxes. Now, they will essentially get a pass on paying those taxes.

According to this story, NASCAR needs the tax break to “maintain the current standard expected by our competitors and fans.” Also, NASCAR’s lobby machine spent $1.1 million influencing legislators to give them the tax break.

Apparently, the “current standard” is worth a $70 million tax break?

Much is often made on this website and others about the fact that NASCAR races have seen declines in attendance over the past decade. And at the same time, television ratings have declined dramatically during that same period of time. Apparently, however, that isn’t as big of a concern as one might think. A government handout of $70 million can help cover a lot of losses.

While many American taxpayers were relieved to hear that a deal had been struck between Democrats and Republicans on Tuesday night, it’s highly unlikely that many “average folks” benefited nearly as much as multi-million dollar companies like International Speedway Corp. and Speedway Motorsports along with Brian France(France family is principle ower of ISC) and O. Bruton Smith did. And by the way, the government did not extend the Social Security payroll deduction relief which means most of us will see our paychecks decrease by a little bit in 2013.

If you have stopped going to NASCAR races in recent years and you think you are no longer supporting that organization, that’s probably not the case. At least it’s not if you’re a tax payer.

[Pacecar]

and the COTA to benefit as well.

http://www.autoweek.com/article/20130103/F1/130109959

[Hrodder]

I have been a NASCAR fan since they were racing on the beach,this will break me from the habit.

 

To me this is O'Bummer's way of trying to buy the red neck vote,well mine ain't for sale.

 

Just sayin.

[direct-flo]

A short article about the 70 million “NASCAR” deal.

 

The so-called "NASCAR tax credit"

[HiTech]

PORK BARREL AT ITS BEST ......NASCAR HAS LOST ME OVER THE YEARS ANYWAY ,.

[fastman]

I have been a NASCAR fan since they were racing on the beach,this will break me from the habit.

 

To me this is O'Bummer's way of trying to buy the red neck vote,well mine ain't for sale.

 

Just sayin.

 

 

So your not happy or your just proud to say your a red neck!!!!!!!!!!!!

[Hrodder]

You got it ,but I was already hip when the hippies got here. Go fgure!

[HiTech]

You got it ,but I was already hip when the hippies got here. Go fgure!

BACK THEN I WAS BOTH ,SAFER .ONE BLOCK FLOWER CHILD .THE NEXT BLOCK HANK SNOW ,, MADE FOR INTERESTING ATTIRE ..THEN BLACK SABBATH AND IRON BUTTERFLY DAYS CAME ALONG .. AND THAT MADE IT EVEN MORE INTERESTING .MAN WE HAD IT TOUGH .YOU WANTED TO TALK TO YOUR FRIENDS YOU HAD TO GO SEE EM .THE DANG PHONES WOULD WEAR YOUR FINGERS OUT SPINNING THEM ..

[Hrodder]

You were flyin too high for my little ol sky so i'm movin on .

 

Yeaeeeeeeeee!

[thumper]

Well Im a littlr confused.Did NASCAR recieve money or only a tax exemption?Didnt NASCAR still have to make the money first?Recieving cash or a tax exemption are NOT the same thing.

 

If it is an exemption this story is just another slant created by a lopsided media.

[toybox racing]

I will have to say,that your average hard working to feed and support your family nascar fan will have a hard time with this. Of course the fed gov did nothing to stop are taxes getting raised. I like nascar but, folks it's time to take a stand. Don't give your hard earned money to nascar so they can get richer. Stop going to sporting events !!!!!!!!!!!!!!!!!!!!! How can you work your but off and go to a game or race and support a player, race track, stadium doing things like this. I can race a car, hit a homerun, make a basket ect. and I sure in the hell don't make 15 million a year. WAKE UP PEOPLE.

I'll stop before I blow up.

[HiTech]

I will have to say,that your average hard working to feed and support your family nascar fan will have a hard time with this. Of course the fed gov did nothing to stop are taxes getting raised. I like nascar but, folks it's time to take a stand. Don't give your hard earned money to nascar so they can get richer. Stop going to sporting events !!!!!!!!!!!!!!!!!!!!! How can you work your but off and go to a game or race and support a player, race track, stadium doing things like this. I can race a car, hit a homerun, make a basket ect. and I sure in the hell don't make 15 million a year. WAKE UP PEOPLE.

I'll stop before I blow up.

looks like we the people need to raze enough money to hire us a lobbyist to fix this bs ....our voted friends [ choke ] in office have lied and lied about working for us the people ..reminds me of a guy who always wanted to be our team leader .he would beg for our vote only to forget us once he won ..i am sick of big corp getting breaks and we get to pay ..

[HiTech]

ill start with a dollar ..

[rebelracewriter]

Sorry Larry....I already heard about it....

 

http://usnews.nbcnews.com/_news/2013/01/04...-interests?lite

 

http://www.therightscoop.com/senate-stuffe...corporate-pork/

 

It's not different than ALL the pork in the "Sandy Aid" bill....These are our so-called politicians doing absolutely nothing to help the little guy, while still wasting billions on special interest groups....But they keep getting elected by all the fools thinking they're getting something for nothing.....Very sad for us and U.S.

 

http://www.taxpayer.net/media-center/artic...-sandy-aid-bill

[poorboy]

I'm not against Nascar for being smart enough to make big money I just don't care for what the racing has become.

[j.j.&s.racing]

bruce does that mean your selling your car and start doing peoples hair and nails.

[jwmbishop]

I think what most of us can easily overlook is that in order to write off ANY depreciation on a racing facility the money has to be spent first. The money in question was what was spent on newest facilities - easy to identify the newest! Lets just look at that.

 

First off to claim 70 million in tax savings via depreciation or section 179 of the Tax Code in a single year one must spend .... drum roll please.... 179 million or more (depending on the depreciable life of the asset)! In the case at hand the "tax savings" were not gifts - they simply let the taxpayer spread the recovery over a shorter period. If I buy a $100.00 widget stamper and it has a five year life - I MUST replace that widget stamper in five years to remain productive and in business - so the tax code allows me (and everyone equally for that matter) to defer taxation (not avoid - it is recovered as ordinary income if the asset is ever sold or placed out of service with any remaining salvage value - and taxed as ordinary income means NO favorable capital gains treatment) on 1/5 of its cost per year for five years. In this case it was 39 year property and the special depreciation allowance (that was at risk of expiration) afforded a 15 year recovery instead. AND THAT DID NOT COME FROM OBAMA OR BUSH IT WAS A PART OF CLINTON'S AMT FIXES!!!!

 

That 79 mil in savings does NOT necessarily go to the pocket of the shareholder - it is funding that is available for more expansion (jobs) and other future taxables - simply cash flow to pay the non deductable portion of mortgages - the principal.!!!

 

Now lets look at the 179 million that had to be spent in order to get that 79 million of depreciation. Would the contract lawyers, real estate brokers, land sellers, engineers, architects, concrete and paving company, the back hoe drivers or even the guy waving the flag at the side of the road where all this work was being done have been able to feed THEIR families if NASCAR was not spending the money by hiring the work to build and improve the facilities? How many JOBS did TMS, Kansas, SoCal etc create? How about THOSE families?

 

If you spend three dollars to make five you have a two dollar taxable gain. Are any of you suggesting we should pay tax on gross income? What if you spend 5 dollars to make 2? where will the tax money come from if the five is taxed? EASILY answered with the current tax code - from FUTURE money by deferring via depreciation. Once the depreciation is used up its ALL taxable. (expounding on above example I spent 5 dollars to make 2 THIS YEAR, 2 next year and two every year for the next 8. SO in ten years the US collects tax on 7.5 dollars - which is MORE than they would have had I NOT been able to defer - as I never would have survived the startup other wise!!!!). THAT'S what make an economy or industry grow (or at least makes it NOT fail financially due to tax burden)!

 

This a quandary faced by every business person and entity in the US. If I spent money on an income production business use asset (all the way from the farmers tractor to the mega mall leasing to stores) how do I recover it? Some advisers say take it all now rather than spread it out as we don't know what will happen in the next administration - but that leaves all of NEXT years income subject to tax - which can place you in a higher bracket - some say spread it out so you don't have a huge tax bill next year.

 

So bottom line is - if the accelerated depreciation had gone away - the tax bill WOULD have been 79 million higher this year - but that same 70 million would no longer have been collected over the next few (funny how the media forgets to mention that part). Deferral IS NOT avoided. Its simply paid later - and allows for the very thing that keeps a capital economy moving - CASH FLOW...

 

When ever I read an article I have two choices. Accept the opinion of the writer or learn the subject and adopt my own. Its easier to just accept the opinion of the writer and THAT'S the reason we have so many ignorant folks taking the opinion of the talking head on CNN to the election booth. THAT'S why we have Obama - the first president ever elected AND RE-ELECTED by the media... ask yourself in five years (when our healthcare has collapsed which it will) if there is any other explanation for his holding office.

[jracer98]

In the interest of full disclosure, I own some ISC and SMI stock and am a contributor to Speedway Children's Charities.

 

SMI built TMS with a minimum of corporate welfare from the cities. Mr. Smith built that track on his own dime, entrepreneurially speaking, in much the same way a guy opens a little cafe or a drycleaner. SMI never came to "taxpayer me" and asked me for truckloads of dollars, unlike certain NFL owners.

 

Further, Mr. Gossege's parking does not cost $70 and you can bring your own cooler.

 

Even further, NASCAR races recognize our military in the prerace and start the day with a very public prayer.

Remember when one of the chaplains prayed, 'Lord, we offer up the sounds of these racing engines as a glorious noise unto you...' ? ROCK ON !!!

 

I don't apologize to anyone for being a NASCAR fan, a NASCAR Member and a NASCAR weekly series competitor.

I don't see NASCAR, et al as corporate welfare moochers....

 

 

JMO

 

jay

[rebelracewriter]

First off to claim 70 million in tax savings via depreciation or section 179 of the Tax Code

 

You lost me from that point on.....

 

 

My POINT was that it APPEARED that the current administration was catering to the NA$CAR voter, since I ASSUME they garnered less than 5% in the past election...

[jwmbishop]

First off to claim 70 million in tax savings via depreciation or section 179 of the Tax Code

 

You lost me from that point on.....

 

I'll simplify - assume I spend 100K on a new building to be used as a factory. I can either depreciate it over 39 years (100,000 / 39 = 2564.00 per year) OR under Sec 179 claim up to 500,000 of actual expense (subject to limits - one of which is it can not create a loss) - or in the case of new assets under the special rules in place from Clinton's stimulus packages use 15 years rather than 39. Then I make 100K in income with 25K of labor expense paying wages - I would have a 75K pre-depreciation taxable income. I then can choose to either use ONLY the depreciation amount (2564) OR can use section 179 to lower my taxable income all the way to ZERO (by using 75K under 179 and then regular depreciation on the remaining cost (25K / 39years). BUT IF I use the 179 and reduce to zero - NEXT year I would pay tax on the ENTIRE income I receive as my deduction is used up! No more deduction as I used it all in the first year! THAT is how NASCAR saved the 79Mil this year - they chose under special rules in place for the tax year they built to use their depreciation over 15 years instead of 39 (1/15th is a larger deduction than 1/39th)! Had that special depreciation allowance been expired in the fiscal cliff they would have had to start remaining amount all over and taken only 1/39th of the unused amount!

 

This same deal would have cost ME about 65K (I built a shopping center in 2000 and elected the special 15 Year over standard 39). But what was added to my tax bill THIS YEAR would not have been on my tax bill in future years - so its not saving tax - it is merely spreading across fewer years!

 

 

My POINT was that it APPEARED that the current administration was catering to the NA$CAR voter, since I ASSUME they garnered less than 5% in the past election...

Understood that it appears so. With the correct verbiage anyone can make it appear as if a pile of dog poo poo is the next best thing to happen to society!

[HiTech]

bruce does that mean your selling your car and start doing peoples hair and nails.

oh heck the secret is out bruce.....i did not tell ...

[poorboy]

bruce does that mean your selling your car and start doing peoples hair and nails.

 

 

I'm not even sure what that means John.

[Pacecar]

http://www.racetalkradio.com/articles/?p=457

(January 5, 2013…RaceTalkRadio.com)

 

After all these years of seeing my favorite sport of auto racing get bashed in the mainstream media it dawned on me that the perfect theme song for NASCAR would be “Charlie Brown.”

 

NASCAR should be asking, “Why’s everybody always picking on me?

 

The only time the news media has anything to say about NASCAR is when there is a horrible crash or someone gets killed or there is something bad to report. This week many in the media, including some of the NASCAR media, were quick to report that NASCAR was getting a special deal as part of the “Fiscal Cliff Avoidance” bill.

 

Who cares if NASCAR doesn’t own any race tracks?

 

If you dig a little deeper you can find out that NASCAR’s favorite congresswoman Betty McCollum started this idiotic rumor and the media accepted her word as gospel.

 

Yes indeed NASCAR fans this is the same lady that made a big deal about military sponsorships. Technically NASCAR does not own a single race track but Ms. McCollum didn’t let that simple fact hold her back. The press was quick to rub in the fact that mean old NASCAR was laughing all the way to the bank.

 

Last week on RaceTalkRadio.com’s “Track Source Radio Show” Tim Frost of the National Speedway Directory did an excellent job of explaining how this tax break came about and how it impacts race tracks all over the country.

 

“What was done was extending a depreciation law that has been around since 2004,” said Frost. “Race tracks got the same breaks as amusement parks and other businesses by shortening the length of time they have to write off an investment made. This directly affects the racing industry and incorrectly refers to this as a NASCAR tax break.”

 

In other words every single race track in the country can write off their investment over seven years on their taxes instead of the next fourteen years. That will not save a race track on their taxes but it will mean more of an impact on the local economy from coast to coast at over 1000 race tracks!

 

Hey Ms. McCollum…you have six race tracks in your congressional district and those tracks are responsible for helping keep some of your constituents employed!

 

I am all for tax reform and doing away with the IRS picking the winners and losers. But calling this latest tax deal the “NASCAR Tax” is a joke! What is coming next… a report on how much carbon dioxide NASCAR adds to the environment causing global climate change?

 

Why’s everybody always picking on NASCAR?

[jwmbishop]

http://www.racetalkradio.com/articles/?p=457

(January 5, 2013…RaceTalkRadio.com)

 

After all these years of seeing my favorite sport of auto racing get bashed in the mainstream media it dawned on me that the perfect theme song for NASCAR would be “Charlie Brown ”... NASCAR should be asking, “Why’s everybody always picking on me?

Why’s everybody always picking on NASCAR?

Sniff. That brought tears to my eyes. I ain't into man love and masci-motions but after that - and as we are SO on the same page here - I COULD make an exception!

 

lol

[thumper]

So its not a cash grant like General motors or Chrysler...err...Fiat but rather a deferment or acelleration of honest deductions from money earned.How can the media present this in such a negative way as to create another witch hunt after NASCAR?It sure looks like we are being played.I like NASCAR,its the top level of a sport I have made a part of my life.Lets dont be Christie and turn on our own,we will be turning on ourselves.