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May 25, 2016
Did you know approximately 300,000 guests attend the Indianapolis 500 every Memorial Day weekend? As we approach the 100th running of this monumental event, let’s take a few minutes to see how the Indiana Department of Revenue ties into the greatest spectacle in racing.
Motorsports Investment District (MID) Filing Requirements
The Indianapolis Motor Speedway and surrounding area are designated as a motorsports investment district (MID) for the purpose of financing capital investments at the Indianapolis Motor Speedway.
Merchants engaged in retail trade within the MID are required to report information on their retail sales and income payments attributable to motorsports racing activities.
Retail merchants use Form MID to report the amount of sales made within the MID and the amount of withholding on salaries or wages paid to employees for work performed within the MID. Additionally, retail merchants must report compensation (including cash) made to contractors for providing services.
Professional Racing Teams Filing Requirements
Professional racing operations use Form IMS-1 to report the amount of compensation paid to team members in the organization within the MID. Race team members are employees or independent contractors who render services on behalf of a professional race team. Additionally, racing operations must report compensation (including cash) made to contractors, such as race drivers, for providing services. Retail sales made within the MID also must be reported on Form IMS-1.
Out-of-State Professional Racers Filing Requirements
Any out-of-state professional racer who receives income resulting from a race event held in Indiana must withhold 3.3 percent after Jan. 1, 2015 and report it to the department during the period it was paid. An out-of-state professional racer is defined as someone who races for a living, doesn’t hold another occupation, and is not an Indiana resident. The Indiana portion of the income is equal to the total income for the year times Indiana duty days divided by total duty days.
Other Tax Types
So far, we’ve discussed tax requirements of race teams and their members, but what about spectators?
Race-goers who want to stock up on memorabilia and souvenirs while at the track can expect to pay Indiana’s seven percent sales tax rate.
Spectators who wish to grab a drink or snack also should expect to pay a food and beverage (FAB) tax. Marion County’s FAB tax rate is two percent.
Dedicated race fans travel far and wide to make it to the Speedway. Those staying in a hotel and renting a room or accommodation in Marion County can expect to pay the 10 percent county innkeeper’s tax (CIT) in addition to Indiana’s seven percent sales tax rate.