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 see how the State Tax Department financially benefits from the greatest spectacle in racing:
Professional Racing Teams Filing Requirements
Professional racing operations report the amount of compensation paid to team members in the organization within the Motorsports Investment District. 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 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.
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.
If you have any questions please contact your Somerset Advisor.