Go-Kart Company Must Pay $2.5 Million in California Taxes

The California Office of Tax Appeals held Monday that racing go-karts owned by K1 Speed Inc. are leased property and must be taxed accordingly, which resulted in the company owing nearly $2.5 million.

K1 disputed the California Department of Tax and Fee Administration’s notice of determination, arguing that their go-kart rentals weren’t leases because they cost less than $20 and were used for under 24 hours, and because they were amusement services rather than leasing services. In addition, the company said it didn’t owe taxes on its licensing fees because the go-kart rentals weren’t taxable leases.

The OTA didn’t buy ...