SMI faces Rockingham tax bill

US track owner Speedway Motorsports Inc is facing a purchase tax claim of almost US$200,000 over its recent acquisition of North Carolina Speedway at Rockingham, VA, from rival International Speedway Corporation. The local Richmond County administration, which levies $2 per $1000 of the value of property transactions, said that an SMI attorney had registered the purchase price at $4.5m, but that the contract with ISC mentions a figure of $100.4m

SMI faces Rockingham tax bill

When North Carolina Speedway Inc recorded its deed of sale with the County, its attorney, Robert G. Brinkley, said that the purchase price was $4.5m and enclosed a $9000 fee. But the County's Register of Deeds, Patsy McDonald, is basing a claim on the higher purchase price.

The transaction was part of a lawsuit settlement dated April 8 between SMI shareholder Francis Ferko and others, and ISC/NASCAR. In part, the settlement read: "SMI shall purchase from ISC, or an agent designated by ISC, all the assets of North Carolina Speedway Inc ('Rockingham') for a price of One Hundred Million Four Hundred Thousand Dollars"

At the County rate of $2 per $1000 of that purchase price, the recording of the deed should have cost $200,800.

As a consequence of the purchase, the Rockingham oval lost its lone remaining date on NASCAR¹s Nextel Cup schedule, which will move to Texas Motor Speedway, also owned by SMI. The discrepancy in the alleged purchase prices may relate to the difference between tangible and intangible assets. North Carolina Speedway lost intangible value when the transaction also resulted in loss of the race date.

Richmond County manager Jim Haynes rejected the premise of that argument. "When you buy your house," he said, "you pay $2 per $1000 on what you pay for that house. We're following the procedures. I've given the information to our County attorney [and] our next move would be to file suit."

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