Entertainment Industry Deductions Wins.
The Boston Bruins of the National Hockey League lost in the first round of the 2017 Stanley Cup playoffs, but subsequently scored a legal victory in U.S. Tax Court. The Bruins’ Tax Court victory doesn’t count in the NHL standings, but it will make it easier for entertainers and even tax professionals to claim full meal expense deductions while on the road. The U.S. Tax Court recently ruled that that the owner of the Boston Bruins could deduct the full amount spent on meals for players and staff at hotels during away games. The Tax Court held that the Bruins’ meals qualified for the exception to a 50 percent limitation on meal expense deductions under the Internal Revenue Code. To qualify for the exception, a taxpayer must establish that the meals were provided in a facility on or near the employer’s business premises and are provided immediately before, after, or during the employees’ workday. In finding for the Bruins, the Court noted that the NHL requires the Bruins to play half of their games away from their hometown arena, and attendance at pregame breakfasts is mandatory for all players. (Jacobs v. Commissioner, 148 T.C. No. 24, T.C. No. 19009-15, June 26, 2017).
Tax professionals agree that the decision may have broader implications than just for the Bruins and professional sports teams. For example, performers such as singers, actors, and authors who travel for their business doing concert tours or promotions could benefit from the Tax Court’s decision. And some predict that the implications could extend beyond the entertainment industry to include full meal deductions for corporate employees traveling to other states for work.