Corporates face ticket price rise after Trump axes deduction
The days of American businesses hiring boxes for clients at concerts and other live events could be coming to a close, after a recent tax overhaul eliminated a 50% deduction for entertainment-related business expenses.
The headline figures from the Tax Cuts and Jobs Act of 2017, signed into law on 22 December, include reduced rates of income tax (until 2025) and corporation tax (permanently), predicted by Trump to deliver a surging economy and thousands of new jobs.
However, the new legislation also eliminates a 50% deduction for business expenses for “entertainment, amusement or recreation”, meaning firms will see a doubling of their costs for concert tickets and hospitality for clients.
Eliminating the deduction “is really going to hurt the small businesses that need to promote their business by entertaining clients”, Charles Capetanakis, a lawyer at New York legal firm Davidoff Hutcher & Citron, tells Bloomberg Politics.
The loss of the entertainment expenses is “painful”, adds Washington, DC, lobbyist Ryan Ellis, although he notes with relief a 50% tax break for client meals was left untouched by the Tax Cuts Act.
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