[Congressional Record Volume 149, Number 112 (Friday, July 25, 2003)]
[Extensions of Remarks]
[Page E1629]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      TAX TREATMENT OF MOTORSPORTS

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                          HON. J. D. HAYWORTH

                               of arizona

                    in the house of representatives

                         Friday, July 25, 2003

  Mr. HAYWORTH. Mr. Speaker, today I am joined by Congressman Jefferson 
and eleven of our colleagues in introducing legislation that would 
clarify the tax treatment of motorsports properties under current law.
  The IRS has created various categories of depreciable assets and 
assigned various depreciable lives to each. Since at least 1962, the 
IRS has listed ``entertainment facilities'' as one such class, and has 
excluded racetracks from its definition. However, in 1974 the IRS 
established a new category of assets called ``theme and amusement 
facilities'' that included a portion of the old entertainment facility 
category, but also expanded the types of assets that qualify as theme 
and amusement facilities. While retaining the exclusion of racetracks 
from the ``entertainment facilities'' category, the IRS dropped the 
exclusion from the theme and amusements category.
  Since that time, the racetrack industry has relied on the theme and 
amusement facility category for depreciating investments. While it has 
varied over the years, today the depreciation period is seven years.
  These taxpayers have made significant investments based on their 
reasonable reliance on the depreciation period for theme and amusement 
assets. Now, many years later, after many tax audits and reviews of 
tracks and track owners across the country, the IRS is questioning the 
right of motorsport facilities to be treated as theme and amusement 
assets.
  Motorsports entertainment facilities have a tremendous positive 
economic impact, both regionally and nationally. Racing promotes travel 
and tourism, and for some venues, a race week or weekend significantly 
boosts the local economy by drawing tens of thousands of fans. The 
building and upgrading of these facilities is a capital-intensive 
activity--and taxpayers who make these investments deserve certainty in 
the manner in which our tax laws allow investments to be written off.
  This clarification of the Internal Revenue Code will recognize the 
long-term reliance of this large and growing industry on a broadly 
accepted interpretation of tax law. The legislation will also provide 
the owners of motorsports entertainment facilities with the certainty 
they need to make new investments. I urge my colleagues to support this 
important and needed legislation.

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