By PETER HUSSMANN
Though state lawmakers last year inadvertently opened the door for the Iowa Speedway owners to collect an additional penny rebate on taxes collected on sales of merchandise at the facility, the threshold was never traversed, state officials say.
The door was opened last year when Iowa lawmakers increased the state sales tax rate from 5 to 6 percent. The penny increase replaced individual school districts' School Infrastructure Local Option sales taxes with a statewide collection system aimed at equalizing funding sources among all districts.
Several years earlier, in assisting the Iowa Speedway's development, state lawmakers approved a measure where the owners of the racetrack are able to obtain a rebate on the state sales taxes paid by retailers at the facility for a period of 10 years, but not to exceed $12.5 million. At that time, the state sales tax was 5 percent. Only the state sales tax is subject to the rebate. The collection and distribution of Newton's local option sales tax is not impacted.
The speedway's sales tax rebate provision runs to Jan. 1, 2016 or until the full amount agreed upon has been paid. Provisions included in the law state it sunsets should ownership of the facility change.
Lawmakers this session unanimously supported - and the governor signed on April 15 - a measure that specifically limits the rebate for sales taxes collected at the speedway to not more than 5 percent of the sales price of merchandise sold at the facility.
Renee Mulvey, public information officer for the Iowa Department of Revenue, said Iowa Speedway continues to collect rebates on only 5 percent of the state sales tax and had not sought to collect on the additional penny that went into effect July 1, 2008. She said raceway officials were aware and agreed to the technical changes included in Senate File 322, the measure that includes specific language on the speedway's rebate amount.
Due to "confidentiality reasons," the Department of Finance cannot release the amount of sales tax refunded to the Iowa Speedway so far, she said.
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