Racing modifications come in to classes of issues:
Safety: On the road, tires must meet DOT (Federal Department of Transportation) specifications (could meet racing regulations also) would be the more obvious one
Emissions: Exhaust systems, intake systems (carb or injection), and others must meet the appropriate regulations. After market (racing) equipment is available that meets the appropriate emmissions regualtions and comes with a certificate stating that. California has stricter regulations, and for vehicles registered there, must meet the requirements. To browse some of the equipment see summitracing.com, and check out tires, exhaust systems, and intake systems.
---- Bob Blick <bobblick@ftml.net> wrote: 
> > Quoting Peter 
> > 
> > 
> > > ... I also
> > > think that there should be some kind of special license for cars modded for
> > > racing, and that that should be made obvious from the outside of the car too
> > > (different colored license plates etc).
> > > ...
> 
> Good luck with that in the US, especially the south :)
> 
> Is there a reason for singling out cars modded for racing? Are they
> hazardous or something?
> 
> Cheers,
> 
> Bob
> 
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