Tag Archive for Entertainment Tax

The Tax Reform Impact On Meals, Entertainment, And Automobile Parking

If you’ve formed certain habits related to how you handle meals, entertainment, transportation, and parking as it relates to your business and taxes, the time to change those habits has come.

As this report notes, tax reform law commonly referred to as H.R. 1 Tax Cuts and Jobs Act of 2017 has changed the deductibility of certain meals, entertainment and transportation expenses. Before 2018, a taxpayer could deduct 50 percent of business meals and entertainment and 100 percent of meals provided through an in-house cafeteria or meals provided for the convenience of the employer (i.e., also known as a de minimis fringe benefit). Read More

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Entertainment Tax – Good For North Carolina

TaxConnections Picture - Special EventAs part of what may be a longer-term tax reform effort, North Carolina enacted legislation in July that makes a few changes. The one that I want to highlight is broadening the sales tax base to include entertainment. That is, admission to live theater and sporting events and a few other activities that fall within.

While this might sound like a bad idea to many people, consider how much some entertainment costs – season tickets to a major league sports team, premium seating for an Elton John concert. To exempt this type of consumption from sales tax just means that the rate has to be higher on tangible personal property, such as clothes and household items. It makes the sales tax less equitable because it ends up exempting a good amount of consumption of high income taxpayers, paying for that with a higher tax on basic consumption items for everyone, such as clothing and school supplies.

The blog post includes reference to data from the Bureau of Labor Statistics on how much is spent on entertainment by high income individuals versus low income individuals – its quite a difference.

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