My least favorite part of the new tax bill: NASCAR successfully lobbied for special tax treatment. Under the law, NASCAR can apply the cost recovery method for investments it makes in race tracks. Cost recovery means that a firm does not have to can shield revenue from taxes on money spent for some kind of purchase. Incidentally, GAAP normally prevents anyone from using cost recovery. In this case, NASCAR will get to apply cost recovery to money it has invested on track upgrades. Language in Section 312 says that NASCAR will get to shield these revenues for seven years – a benefit that has a market value of $70 million.
This is not the first time that the Bruton family has used a highly politicized tax bill to its financial advantage. In the 2010 Closing Tax Loopholes Act, a special line item gave NASCAR the right to depreciate their investments in race tracks over seven years. With that, NASCAR was able to speed up the benefits of allocating costs against revenue and thus to have the benefit of shortening the time horizon under which it can reduce its tax obligations. If you remember, the Closing Tax Loopholes Act was passed under immense political energy for extending unemployment benefits.