S.C. lawmakers racing to give more incentives to Darlington Raceway

April 20, 2018

Investigative Reports

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By RICK BRUNDRETT

The decades-old Darlington Raceway is getting a pricey facelift – and also could soon receive another big taxpayer-backed gift under fast-track legislation that the raceway’s president says was the company’s idea.

If it passes, the S.C. House bill would be the second stand-alone legislation since 2013 benefiting the raceway, which annually hosts the popular Southern 500, a NASCAR Cup Series race. The racetrack also gets an admissions-tax rebate under an annual state budget proviso that was first introduced in 2011.

The latest legislation would exempt state and local sales taxes on “building materials, supplies, fixtures, and equipment for the construction, repair, or improvement of or that become a part of a motorsports entertainment complex.”

The state Department of Revenue can approve the tax break based on a “practical plan” of a capital investment of at least $10 million within a five-year period, under the bill.

The legislation doesn’t specifically name the Darlington Raceway as the beneficiary of the tax break. But under state law, the raceway is the only venue in South Carolina that fits the definition of a “motorsports entertainment complex.”

Darlington Raceway President Kerry Tharp told The Nerve this week that officials with the racetrack, which is owned by Daytona Beach, Fla.-based International Speedway Corp., were “really the authors of the bill, working with some of our legal folks.”

He said the tax savings under the bill “could be in the neighborhood of $400,000,” noting the company expects to meet the $10 million investment threshold under the legislation “in a relatively short period of time.”

The Southern Strategy Group, a lobbying firm with 10 offices in five states, including two registered lobbyists in Columbia for the Darlington Raceway, “worked with the entire (S.C.) House and Senate on making sure that they understood the significance of the bill,” Tharp said.

The lawmakers included, according to Tharp, House Speaker Jay Lucas, R-Darlington and the bill’s main sponsor. Lucas didn’t return a written message this week from The Nerve seeking comment.

The bill, which has 13 other House co-sponsors, including Rep. Bill Sandifer, R-Oconee, chairman of the Labor, Commerce and Industry Committee, sat untouched for a year before it was amended by the House Ways and Means Committee on March 22, then easily passed the full House by a 97-1 vote on a key second reading on April 3, and was referred the next day to the Senate Finance Committee, House records show. The renovation project at the raceway began around Feb. 1, Tharp said.

The next meeting of the Finance Committee, chaired by Senate president pro tempore Hugh Leatherman, R-Florence, is tentatively set for Tuesday, according to a committee staffer.

If the bill becomes law, it wouldn’t be the first time the General Assembly has passed legislation targeted for the raceway, nicknamed the track “Too Tough to Tame.”

Lawmakers overwhelmingly approved a 2013 bill sponsored by Sen. Gerald Malloy, D-Darlington and co-sponsored by Leatherman and four other senators, that eliminated the requirement that a “motorsports entertainment complex” have at least 60,000 “fixed” seats to be eligible for a 10-year, 50-percent exemption on admission taxes, as The Nerve reported then.

In addition, under a state budget proviso first introduced in 2011 by Malloy and Sen. Shane Martin, R-Spartanburg, who runs an automotive consulting business and has had strong ties with NASCAR, a “motorsports entertainment complex facility” can receive up to $114,000 annually in admission-tax rebates for events held at a “NASCAR sanctioned motor speedway or racetrack that hosts at least one race each year featuring a preeminent NASCAR cup series.” Lawmakers have annually renewed the proviso, records show.

Although she didn’t identify the racetrack, Bonnie Swingle, spokeswoman for the state Department of Revenue, said in an email response this week to The Nerve that under state law and the budget proviso, “qualifying taxpayers” submit 2.5 percent of the collected 5 percent admissions tax, and get back up to $114,000 of the submitted taxes to DOR.

The 50-percent admissions tax break was effective July 1, 2008, and expires this July 1, authorized under a 2008 law dealing with a variety of tax issues unrelated to the raceway. Asked if his company planned to seek an extension of the admissions tax break, Tharp replied, “We’ll just have to see how that transpires.”

Tharp said the racetrack renovation project involves, among other things, replacing old seating and making improvements to restrooms and concession facilities. It is expected to be completed by Aug. 1, before the 69th running of the Southern 500 race over the Labor Day weekend, he said.

The racetrack generates “upwards of $64 million” in direct and indirect “economic impact” in the state, Tharp said. He also said lawmakers’ support of the latest bill will send a positive signal to the raceway’s corporate owner.

“When you have support that we do in the state of South Carolina, from the top all the way down, it goes a long way with our parent company knowing that the state of South Carolina supports Darlington, because they have a lot of choices to make when it comes to investing in their various track properties,” he said.

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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