Letting NASCAR Tax Break Die Would Be a Win for Policy Scrutiny

Congress will soon be scrambling to renew dozens of tax provisions that expired at the end of 2025. But it should let the motorsports entertainment complex depreciation break, also known as the NASCAR tax break, go the way of the dodo bird. This wouldn’t just save a few million dollars in tax revenue per year; it would send a rare signal that the tax code isn’t a permanent rewards system for well-connected industries.

The “motorsports depreciation provision” first passed the checkered flag more than 20 years ago as a measure to help track owners continue to recover their investments on a shorter timeframe. But like so many supposedly temporary tax measures, it has found its way into extender packages year after year—without any real policy rationale or economic justifications.

Today, a NASCAR facility can be written off in seven years, which is faster than a farm building, residential property, or wastewater treatment plant. It’s a curious conception of economic policy where souvenir shops and concession facilities apparently have a shorter lifespan than affordable housing.

The provision’s origin also reflects a particular political and tax policy moment that Congress should be willing to move beyond. It was enacted as part of the 2004 American Jobs Creation Act—a massive tax bill that used accelerated depreciation as a kind of catch-all incentive tool.

The original justification for the seven-year schedule was similarly rooted in stasis. Before 2004, motorsports facilities were lumped into a category with theme parks, which also received accelerated depreciation.

When the Department of the Treasury moved to reconsider that classification, Congress stepped in and mandated a continuation of the seven-year schedule for motorsports facilities through 2007—ostensibly to preserve the status quo. Since then, the provision has been routinely extended.

Unlike broader incentives aimed at stimulating investment across industries or regions, or even dubious tax breaks for public sports arenas, the motorsports provision serves a distinctly narrow slice of the tax base. It benefits a handful of wealthy track owners operating in a highly profitable, ticketed, and sponsor-driven environment. It also offers very little in terms of economic spillover or job creation.

We’ve spent years debating whether public subsidies for sports stadiums are a good investment of taxpayer funds (spoiler: they aren’t), but even those boondoggles come with at least the illusion of jobs, tourism, or local development. By comparison, subsidizing the depreciation of a track fence or a ticket booth makes stadium financing look like a veritable economic engine.

Congress needs to establish a framework for evaluating expiring tax provisions that goes beyond lobbyist persistence or legislative reflexiveness.

Photographer: Jared C. Tilton/Getty Images

Of course, the motorsports depreciation break hasn’t survived because Congress believes in it, but because the lobbyists interested in saving it have overcome public indifference. In the rush to authorize dozens of expiring provisions, this kind of low-visibility carveout can slip by on cruise control.

Congress should allow the seven-year depreciation period for motorsports entertainment facilities to remain expired and resist any further efforts to reinstate it. These assets should revert to the standard recovery periods applied to similarly situated commercial real estate—typically 15 or 39 years—based on their actual economic use and real-world lifespan.

One might ask whether Congress would seriously consider creating a tax carveout for racetrack facilities in 2026, absent its prior existence. If not, then it shouldn’t survive simply because it was recently in the code. Letting it go would show Congress is at least willing to say “no” to one industry by doing nothing. That alone would be progress.

More broadly, and ambitiously, Congress needs to establish a framework for evaluating expiring tax provisions that goes beyond lobbyist persistence or legislative reflexiveness. Each extender should be addressed on core policy metrics, just as the underlying policy would be if considered de novo:

• Does it promote economic efficiency?
• Does it produce quantifiable public or economic returns relative to its cost?
• Does it deliver equitable benefits across income and industry lines?
• Does it align with broader goals of the tax code?
• Is it functionally administrable and resistant to abuse or gaming?
• Has its effectiveness been reevaluated since enactment or its last extension?

Without a structured, disciplined, and formulaic approach, the code will continue to be shaped by prior lobbying and inertia rather than modern intention. Congress should evaluate each tax break extension on actual merit based on current economic conditions.

Ending the NASCAR carveout would restore a sliver of horizontal equity to the tax code. More importantly, it could be a first step for Congress to stop reflexively extending provisions that are set to expire. If Congress can let even one unjustified carveout go, it will open the door to a more deliberate and principled approach to tax extenders moving forward.

Andrew Leahey is an assistant professor of law at Drexel Kline School of Law, where he teaches classes on tax, technology, and regulation. Follow him on Mastodon at @andrew@esq.social.

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