S.1763 - Motorsports Fairness and Permanency Act of 2025 (119th Congress)
Summary
The Motorsports Fairness and Permanency Act of 2025 (S.1763) aims to amend the Internal Revenue Code of 1986, specifically Section 168(i)(15), to make permanent the 7-year recovery period for motorsports entertainment complexes. This bill, introduced in the Senate, seeks to provide long-term tax certainty for these businesses by removing the expiration of the accelerated depreciation allowance.
The bill's primary action is to strike subparagraph (D) from Section 168(i)(15) of the Internal Revenue Code, which currently limits the 7-year recovery period. By making this change permanent, motorsports entertainment complexes can continue to depreciate their assets over a shorter timeframe, potentially leading to tax savings.
Sponsored by Senators Young and Warner, the bill reflects a bipartisan effort to support the motorsports industry through tax policy. Its referral to the Committee on Finance indicates the Senate's intention to carefully consider the bill's financial implications.
Expected Effects
The primary effect of this bill would be to provide permanent tax relief to motorsports entertainment complexes. This could incentivize investment and development in the industry due to the certainty of the 7-year recovery period for depreciation.
By allowing these businesses to depreciate assets more quickly, the bill could free up capital for other investments, such as facility improvements or marketing. This could lead to increased revenue and potentially job creation within the motorsports sector.
However, making this tax break permanent could also reduce federal tax revenue, potentially impacting other government programs or contributing to the national debt.
Potential Benefits
- Increased Investment: Permanent tax certainty could encourage more investment in motorsports entertainment complexes.
- Job Creation: Potential for new jobs due to increased investment and expansion.
- Economic Activity: Stimulates economic activity in regions where these complexes are located.
- Tax Simplification: Simplifies tax planning for motorsports businesses by removing uncertainty.
- Competitiveness: Helps these businesses remain competitive by reducing their tax burden.
Most Benefited Areas:
Potential Disadvantages
- Reduced Tax Revenue: Permanently reduces federal tax revenue, potentially increasing the national debt.
- Tax Inequity: May create a perceived unfair advantage for the motorsports industry compared to other sectors.
- Potential for Abuse: Could incentivize excessive investment in depreciable assets solely for tax benefits.
- Limited Scope: Benefits a specific industry, rather than the broader economy.
- Complexity: Adds complexity to the tax code by creating industry-specific provisions.
Most Disadvantaged Areas:
Constitutional Alignment
This bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill does not appear to infringe upon any specific constitutional rights or limitations.
However, the Constitution mandates that all duties, imposts and excises shall be uniform throughout the United States. While this bill doesn't directly violate that clause, the singling out of one industry for preferential tax treatment could be argued as a violation of the spirit of the clause.
Ultimately, the constitutionality of the bill would likely depend on whether it can be justified as a reasonable exercise of Congress's taxing power and whether it is deemed to serve a legitimate public purpose.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).