Young, Carson push permanent tax break for racetrack improvements

INDIANAPOLIS (WISH) — A racetrack manager on Monday said changes to a tax break will help tracks improve the fan experience and thus stay open.

Since the Indianapolis Speedrome came under new ownership in 2016, the owner has installed new concession stands, new lighting, and a new scoreboard and is in the process of replacing grandstands that date back to the late 1970s. General manager Jonathan Byrd says the grandstand project alone costs $500,000 and could easily have cost three times as much.

“We are replacing them with a new I-beam construction,” he said. “The fans love it.”

Every year since 2004, Congress has renewed a provision that expands the amount racetracks can deduct from their taxes on capital improvements such as new facilities or track upgrades. The measure shortens the recovery period for those tax deductions from 39 years to 7 years.

Byrd says this means a track owner could deduct roughly $14,000 worth of expenses from a $100,000 project in a given tax year instead of roughly $2,500. Sen. Todd Young, R-Indiana, filed legislation last week to make the tax break permanent, thus eliminating the need for Congress to reauthorize it every year. Congressman Andre Carson, D-Indiana, is co-sponsoring companion legislation in the House.

Tom Deery, of the racing industry group Performance Racing Industry, says the tax break makes it more financially attractive to make improvements to track facilities in the near term. He said any entertainment facility has to keep reinventing itself to ensure the best customer experience.

Unlike an NFL stadium, Deery said most racetracks around the country are small, family-owned businesses. They also usually lack the sort of public financial commitments large stadiums get.

“When people come, they want to make sure that they’ve got the best possible experience,” he said. “So tracks are now looking at improving things like improving seating and restrooms and walkways. In one way, this is kind of an encouragement for those facilities to make that step.”

Byrd says it’s good to see the bill get bipartisan support. He said he personally knows of at least six tracks that have been unable to reopen this year, so tracks need to be able to improve their facilities whenever possible to bring in more fans. The Speedrome has begun installing a beer garden to appeal to fans who want to get up and socialize.

“We’re going after the Carmel mom, we’re going after the Center Grove mom, mom decides a lot what we’re going to do, so if she’s not happy, no one is happy,” he said. “So clean restrooms, a clean facility, a safe feeling, all those types of things are the things we’re striving for.”

So far, neither the House nor Senate versions of the bill have gotten a hearing despite bipartisan support.