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August 26, 2005
Sox seek landmark tax break
The Boston Red Sox are seeking to have 93-year-old Fenway Park placed on the National Register of Historic Places, in an attempt to be eligible for federal tax credits for renovating landmark structures. (While the Boston Globe asserts that no other baseball stadium has been so honored, in fact Detroit's Tiger Stadium was placed on the National Register by local preservationists, over the objections of the team.)
The total value of the tax break is unclear, since the costs of renovation are unknown, but we can make some estimates. The Red Sox would be eligible for a tax credit of 20% of their total renovation costs; as the IRS notes, this is a tax credit, not a tax deduction, so it actually earns them a tax rebate of 20%. (Since the marginal corporate income tax rate is now down to 20%, this is effectively the same as a 100% tax deduction.) However, reducing stadium costs would also reduce the Sox' revenue-sharing break from MLB, knocking 40% off of the benefit, and leaving the team with a 12% discount on their total renovation costs.
If the Sox spend their projected $200 million on renovations, then, they'd get $24 million back at the end of the day - not an incredible windfall, but nothing to sneeze at, either. Something for George Steinbrenner and Michael Bloomberg to consider.