Motor sports promoter International Speedway Corp. will get back $97 million of the $118 million it deposited with the IRS as part of a tax dispute, plus another $14 million in interest.

The dispute arose from a 2002 IRS examination that challenged the depreciation claimed on some of the company's racing facilities. The company owns venues such as the Daytona International Speedway and the Talladega Superspeedway.

Under Section 168 of the Tax Code and applicable IRS guidance, International Speedway noted that there is a particular asset class and corresponding depreciation period for theme and amusement parks and other similar combinations of entertainment attractions. The company asserted that it has consistently applied that asset class to its motor sports entertainment facility assets.

Under this classification, assets are considered seven-year property for tax purposes (i.e., depreciated over a seven-year period). The IRS disputed that the asset class applied to some of the company’s assets that were placed in service prior to Oct. 23, 2004. Under the settlement, the company and the IRS have reached a compromise on this issue.

In October 2008, International Speedway pointed out, Congress passed legislation that provided a two-year extension of a Tax Code provision in the Federal American Jobs Creation Act of 2004 that provided owners of motor sports entertainment facility assets a seven-year recovery period for tax depreciation purposes. That provision still applies to motor sports entertainment facility assets placed into service by the company between Oct. 23, 2004, and Dec. 31, 2009.

As a result of the settlement, the company is currently pursuing settlements on similar terms with various state tax authorities, and expects to pay between $6 million and $9 million to finalize the settlements with the various states.

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