Week in Insights: No Property Tax for Athletics’ Vegas Stadium

If you’ve been following baseball at all this season, you know the two main storylines: Luis Arraez’s quest to bat 0.400 and the Oakland Athletics’ now seemingly inevitable move to Las Vegas. If your connection to baseball is tax, you’re likely just thinking about the $120 million in tax-exempt public financing for the new stadium.

Lost in much of the reporting, or at least not highlighted, is the fact that the owners of the stadium would owe no property tax on the stadium and land under it. The current form of the bill doesn’t mention a time limit on the exemption, only stating that the stadium will be the property of the stadium authority and shall be exempt from ad valorem property taxes.

To the untrained tax eye, that may seem like nothing more than a small sop to ownership—especially considering the overall $380 million in public funding. Regular readers of Bloomberg Tax, however, will remember the cautionary tale of Madison Square Garden. A property tax exemption tossed at ownership in 1982 to keep MSG from moving to New Jersey now has a total tax expenditure of more than $875 million, with an ongoing annual cost of $43 million.

Las Vegas is not Midtown Manhattan, so the lost property tax revenue will most assuredly not rise to MSG levels. But in the decades to come, it will have the capacity to outstrip the public fund expenditure of construction for the new Athletics’ home. Readers of Bloomberg Tax are batting 1000, because they already know that.

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Trevor May of the Oakland Athletics pitches in the ninth inning against the Tampa Bay Rays at RingCentral Coliseum on June 13, 2023, in Oakland, Calif.

Photographer: Brandon Vallance/Getty Images

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State Insights

Avalara’s Scott Peterson shares how businesses have used technology to adapt to new nexus and marketplace rules for state sales taxes since the 2018 ruling in South Dakota v. Wayfair.

Federal Insights

Kristen Gray of EY explains what information businesses need to submit to the Energy Department when applying for clean energy tax credits and how tax professionals can assist them through the process.

Perkins Coie’s Andrew Kline and Tommy Tobin share potential outcomes from the Food and Drug Administration’s ongoing review of marijuana regulations.

Businesses converting to IFRS from US GAAP must understand potential changes in tax disclosures and other reporting differences, say Riveron’s Anne Heffington and Justin Czapczyk.

Attorney Michael Burwick shares how US sellers of wineries and vineyards can use several tax deferral strategies to their advantage.

Companies should start reviewing their tax systems to prepare for an overhaul of income tax disclosure requirements by the Financial Accounting Standards Board, say Marcum’s Robert McGuinness, Mark Ladolce, and James Petty.

Bruce Givner of KFB Rice examines a recent lawsuit against the estate of a 2008 lottery winner whose taxes weren’t paid at the time of his death.

Global Insights

Pavlo Boyko of TMF says that when it comes to finance technology, the tax function is often seen as falling behind, and asks how companies can better synchronize tax with other corporate finance functions.

Diego Andrés Almeida and Marco Moya of Almeida Guzmán Asociados describe the problems faced by Ecuador President Guillermo Lasso when attempting to introduce tax measures, after his move to dissolve the National Assembly and call an election.

Ignacio Gepp of Puente Sur comments that progress on Pillar Two in Latin America has been slow and explains that the rules’ impact may vary across countries in the region, so that some may be more prepared to enact legislation than others.

Alexandra Loran-Wisznievski and Simon Moger of EY explain how the EU aims to accelerate possible state aid for net-zero projects, and discuss how multinationals can position themselves in the green innovation race.

Tax Journals

In a two-part series, Melvin Warshaw and David Lesperance focus on the immigration options involved in moving an Israeli businessperson and their family to the US on a part- or full-time basis. They also look at the interaction between tax and immigration law consideration and possible strategies for Israeli entrepreneurs considering a possible relocation to the US from Israel.

*Note: Your Bloomberg Tax login will be required to access Tax Journal articles.

Columnist Corner

Andrew Leahey discusses how a targeted tax on America’s billionaires would raise hundreds of millions of dollars in revenue, noting that the biggest obstacle to such a tax is lack of political will.

Career Moves

Pamela Dennett and John Clausen have joined EisnerAmper as partners in the private client services group in Dallas and the SALT group in San Francisco, respectively.

Carrie Keller has joined Lathrop GPM as counsel in the real estate and tax credit practice group in St. Louis.

Spotlight

This week’s Spotlight is on Andrew T. Davis, a partner in the tax department of Cravath, Swaine & Moore in New York. He focuses his practice on the tax aspects of mergers and acquisitions, including spin-off, private equity, and SPAC transactions, as well as securities offerings.

News Roundup

It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team.

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• Pressure from outside investors is driving up the market values of family-run vineyards and farmland throughout France to the point that some can’t pay the inheritance tax without running up long-term debt or selling off a portion of their estate.
• Lawmakers led by Sen. Elizabeth Warren and four other Democrats want IRS Commissioner Danny Werfel to make the agency’s free pilot electronic tax filing system available to more taxpayers next filing season.
• California lawmakers approved most of the state budget package Tuesday, including an extension of the film tax credit, after reaching agreement late Monday with Gov. Gavin Newsom on his push to include measures streamlining infrastructure projects.
• American Indian tribes for the first time can access millions of dollars in tax incentives to help fight climate change and offset project costs.

Atmosphere on the red carpet at the Los Angeles premiere of Lucasfilm’s “Indiana Jones and the Dial of Destiny,” at the Dolby Theater in Hollywood, California, on June 14, 2023.

Photographer: Michael Tran/AFP via Getty Images

Our Wish List

With 46 states starting their fiscal year on July 1, we’re looking for Insights that focus on what tax professionals should know about the most recent changes in state and local taxes. We’d also like pieces about the shifting landscape for state digital taxes.

If you have an interesting, never-published article for publication, you can contact our Insights team by email at TaxInsights@bloombergindustry.com.

Our Team

We talk about tax a lot. But there’s much more that you might hear us talking about if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week.

Watching
Katharine Butler (Acquisitions Manager): I saw “Patriots” at the theater. It’s a drama about the rise and fall of Russian oligarch Boris Berezovsky and his relationship with Vladimir Putin and Roman Abramovich on his way up and down.

Reading
Melanie Cohen (Content Editor): “West With Giraffes,” a novel based on the true events of two giraffes who miraculously survive a hurricane on the East Coast and get driven across the country to live at the San Diego Zoo.

Listening
Daniel Xu (Content Editor): I’ve been on a Paramore kick lately, listening to “This Is Why,” the band’s latest album, in addition to their earlier records.

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