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COMMITTEE REPORT
May 9, 2001
S. 349
Introduced by Senators Branton, Verdin, Leatherman, Peeler, McConnell, Giese, Grooms, Bauer, Waldrep, Wilson, Mescher, Ryberg, Fair, Hayes, Thomas and Martin
S. Printed 5/9/01--S.
Read the first time February 20, 2001.
To whom was referred a Bill (S. 349) to amend Section 12-21-2420, Code of Laws of South Carolina, 1976, relating to the rate of the admissions tax and exemptions from the admissions tax, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
REVENUE IMPACT1
This bill is expected to reduce general fund admissions tax revenue by an estimated $76,900 in FY 2001-02.
Explanation
This bill would exempt racetrack and motor speedway operators from admissions taxes owed on permits and/or passes sold to individuals entering the pit road areas of racetracks. Pit road passes are commonly sold to drivers, owners, crewmembers, and sometimes spectators. Current law requires racetracks, motor speedways, and all other places of entertainment not exempt under Section 12-21-2420 to collect a 5 percent tax on charges collected for admission into these facilities. State law defines 'admission' as "the right or privilege to enter into or use a place or location". According to a 1985 revenue ruling issued by the Department of Revenue (DOR), entry into pit road areas meets the definition of admission, thereby making charges collected for entry into such areas subject to admissions tax. According to DOR, there are approximately 35 auto/motorcycle racetracks operating in South Carolina. In FY 2000, DOR collected approximately $725,000 in admissions tax revenue from these facilities. Adjusting for inflation, we estimate that these facilities will generate an estimated $769,000 in admissions tax revenue for the state in FY 2002. Based on industry data and conversations with racetrack officials, an estimated 10 percent of racetrack admissions tax revenue is generated from the sale of pit road passes or permits. The remaining 90 percent of these revenues are generated from the sale of general admission, or 'grandstand seating' tickets. Multiplying the estimated admissions tax revenue to be generated by racetracks in FY 2002 by an estimated 10 percent of revenue that would be lost by exempting sales of pit road passes from admissions taxes is expected to reduce general fund admissions tax revenue by an estimated $76,900 in FY 2001-02.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 12-21-2420, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE RATE OF THE ADMISSIONS TAX AND EXEMPTIONS FROM THE ADMISSIONS TAX, SO AS TO PROVIDE THAT ENTRY INTO THE PIT AREA OF MOTOR SPEEDWAYS OR RACETRACKS FOR DRIVERS, CREW MEMBERS, SCOREKEEPERS OR OTHER SUPPORT STAFF, CAR OWNERS AND SPONSORS, AND FAMILY MEMBERS THEREOF IS EXEMPT FROM THE ADMISSIONS TAX UNDER CERTAIN CONDITIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-21-2420 of the 1976 Code is amended by adding a new item appropriately numbered to read:
"( ) for entry into the pit area of motor speedways or racetracks for drivers, crew members, scorekeepers or other support staff, car owners and sponsors, and family members thereof where an annual license or participation fee is charged these persons by the speedway or racetrack for entry into the pit area and no charge is made on a per event basis;"
SECTION 2. This act takes effect upon approval by the Governor.
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