Gentlemen, Start Your Tax Breaks!
On New Years’ Day, Congress came together to pass bipartisan legislation to avert the fiscal cliff, an unusual sight for these ultra-polarized times. Less unusual were the special interest tax breaks that members of Congress attached to the bill. Groups as varied as Puerto Rican rum producers and Hollywood filmmakers saw their interests protected at a cost to taxpayers of roughly $77 billion.
One of the most eye-popping provisions extends a tax break for racetrack owners. Call it the NASCAR loophole. The exemption allows racetrack owners to speed up the depreciation of their tracks over seven years instead of the nearly 40 years it is estimated to actually take them to depreciate, costing the government roughly $40 million in 2011. As Donald Marron of the Tax Policy Center told a House Ways and Means subcommittee last June, the NASCAR carve out “adds to the perception that the tax code is riddled with special interest giveaways.”
So how did the NASCAR loophole make it into the must-pass fiscal cliff bill? It shouldn’t come as a surprise that NASCAR and other organizations with a stake in stock car racing have spent significant sums on campaign contributions and lobbying. According to campaign finance records examined by CREW, NASCAR employees contributed over $408,000 to political campaigns and committees during the 2012 campaign cycle, while employees of International Speedway contributed over $116,500.
It couldn’t have hurt that the top congressional recipient of NASCAR money and the second-highest congressional recipient of International Speedway money was Senate Minority Leader Mitch McConnell (R-KY), who has been co-credited with resolving the legislative crisis “through old-fashioned backroom bargaining.”
CREW also examined the lobbying efforts of racing stakeholders. In 2011 and the first three quarters of 2012, NASCAR spent $190,000 on lobbying, while International Speedway spent $270,000. Lobbyists for both organizations focused on the Motorsports Fairness and Permanency Act of 2011, which would make the tax break permanent. Other organizations, including the Automobile Competition Committee for the United States (ACCUS), the American Motorcyclist Association, and the Chicagoland Speedway, also lobbied on the legislation. In addition to their lobbying efforts, both NASCAR and International Speedway employees directed campaign contributions to co-sponsors of the legislation, including Senators Debbie Stabenow (D-MI) and Sen. Bill Nelson (D-FL), and Representatives Vern Buchanan (R-FL), Sandy Adams (R-FL), John Mica (R-FL), Tom Reed (R-NY), and Debbie Wasserman-Schultz (D-FL).
Rep. Buchanan, the original House co-sponsor of the push to make the tax break permanent, appears to have a particularly close relationship to the car racing industry. When Rep. Buchanan filed the legislation in 2011, he was scheduled to attend a fundraiser at Daytona International Speedway during the Coke Zero 400. The chairs of the fundraising event were NASCAR CEO Brian France and International Speedway President Lesa France Kennedy. Additionally, the Sunlight Foundation notes that Buchanan, who owns several car dealerships, has “received more than $530,000 over his career from the automotive industry, some of which promote their brands through NASCAR events.
Rep. Buchanan was one of the 85 House Republicans who voted in favor of the fiscal cliff deal.