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For many businesses, the bulk of top client deals are worked outside the boardroom. Entertaining clients over drinks, at the golf course, or at a game or concert in a luxury suite helps build a relationship with customers and cement business that can propel the account forward. Client entertainment is a cornerstone of the tourism industry, but with the advent of the Tax Cuts and Jobs Act of 2017, some companies are running scared and cutting ties with costly entertainment expenses.

What's changed?

- Prior to the TCJA, companies could deduct 50 percent of entertainment expenses as well as 50 percent of business meals.

- Today, companies may no longer deduct any entertainment expenses. Business meals may still be deducted at a 50 percent rate.

Regardless of the fear surrounding the changes in the law, businesses that entertain and successfully draw ROI from entertainment expenses should still see a benefit. "As I always tell clients, when making a business decision, one should never let the tax tail wag the economic dog." says Robert Conner, director at BKD CPAs & Advisors. "The TCJA includes many business-friendly provisions, such as the reduction in the corporate rate from 35 percent to 21 percent, a 20 percent pass-through income deduction for eligible taxpayers, repeal of the corporate alternative minimum tax, enhanced deductions for equipment purchases and many more."

In the world of sports entertainment, including entertaining clients in luxury suites, it was never possible to deduct the full value of a suite lease. Suite lease holders were allowed to use only the face value of the tickets, making the overall net change as a result of the TCJA minimal.

"We anticipate that businesses who depend on corporate entertaining not necessarily curbing their budgets because of tax reform. Rather, we expect those business to continue pushing smart tactics to measure the ROI of their spends, and...

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