While a lot of corporate America is rejoicing about having a lower corporate tax rate in 2018 and beyond (it was made permanent), there are some pockets of business that aren't too happy with a particular new tax code revision.
If you conduct business on the golf course -- take out clients to play or host them at your golf club or play in a tournament together -- you will no longer be able to deduct 50 percent of those expenses off your corporate/business taxes. Those expenses fell under the deduction for entertainment, amusement or recreation expenses incurred as a result of genuine business-related activities. Basically, if you showed people a good time in hopes of closing a deal, you were allowed to deduct the cost of having that good time because it meant you were not-so-secretly doing work.
Now, you won't be able to do that, per Fox Business.
That's a huge problem for golf, which sees its fair share of money come from businesses which host a nice day of golf for their clients in hopes of landing accounts and signing deals.
Why was the deduction cut, especially since President Donald Trump owns or runs 17 golf courses and has talked extensively about closing deals while playing golf? The industry is left scratching its head. Golf-industry groups are also unsure just how much of an impact this change will have on business golf. After all, it's still a good way to conduct business in a friendly, fun atmosphere. You just won't be able to deduct half of the cost of it.
This was done because tax hawks and folks at the IRS have long seen this kind of deduction as a potential loophole, claiming real business was conducted when perhaps it was nothing more than debauchery hoping to curry favor for future considerations. Is that conducting business? Depends on who you ask.
Then again, with the one-time shock of suddenly having more money in-hand than going to the federal government, perhaps this won't have a long-term impact on golf so much as a potential temporary pain. Perhaps with more money in hand through lower rates, businesses won't even care about the change to the deduction.
However, while you won't be able to deduct half the cost of a green fee anymore, you'll still be able to deduct 50 percent of the cost of the food and drinks afterward, as deductions for business-related meals remained intact for some reason. Apparently eating a meal is more likely to lead to legit business chatter than spending hours on a golf course getting to know someone and having almost endless opportunity to talk and build relationships.