Legislative Look: "Amusement Tax" on Racetracks

July 10, 2017

What is the "Amusement Tax" and why should we have concerns as it applies to motorsports? Are any of the tax revenues collected by motorsports being used to benefit the tracks who pay the tax? How about track infrastructure improvements and maintenance?  Should race tracks be classified the same as movie theaters and amusement parks?

 

In February the USMA raised concern over the Illinois proposed "Amusement Tax" on race tracks.  This issue was raised again at the recent USMA Pennsylvania Motorsports Summit.  This tax is common in one form or another across many States and Counties around the nation.   

 

Generally, enabling legislation at the state level provides for the implementation of an amusement/admissions tax and racetracks are responsible for collecting it.  The State of Illinois looked to increase the amusement tax to deal with its state budget, which is currently billions of dollars in the red.

 

The State of Ohio calls this tax an admissions tax and it applies to sporting events, movie theaters, and theme parks.  Like most states, Ohio varies from 1.5% to 8%, with the majority applying a 3% rate.

 

In Texas, a sales tax can be levied for amusement services.  Government entities and non-profits providing amusement services are exempt from charging this tax. 

 

California permits municipalities to charge an admissions tax and the City of Santa Cruz charges 5% on the price of admission or event registration.  The admissions tax is not levied at Disneyland by the City of Anaheim for the next three decades due to the famous theme park committing $1 billion in improvements to their venue. 

 

The State of Virginia enables an amusement tax which is applied at the municipal level.  The City of Lynchburg requires all businesses to charge a 7% admissions tax for all activities/events.   

 

Missouri has a law permitting an admission tax on amusement, entertainment, and athletic events.

 

South Carolina charges an admissions tax but it is waived for entry into the Pit area of NASCAR sanctioned motor speedways or racetracks for drivers, crew members, or car owners where a participation fee is charged these persons by NASCAR, or by the speedway or racetrack. 

 

The S.C. Motorsports Admission Tax Exemption extends to facilities with at least three scheduled days of motorsports events each calendar year sanctioned by a nationally or internationally recognized governing body of motorsports that establishes an annual schedule of motorsports events.  The motorsports venue must engage in tourism promotion.

 

We are interested in your opinion of state/local governments charging an Amusement/Admissions Tax. 

 

Please contact USMA Government Affairs at phone #844-643-2777 or via email at robert@unitedstatesmotorsports.com

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