golf as an allowable business expense

GOLF AS AN ALLOWABLE BUSINESS EXPENSE

ENTERTAINMENT EXPENSE LOBBY

Presented by: Jeff Calderwood, CEONGCOA Canada

ENTERTAINMENT EXPENSE LOBBY

Now is the time to RIGHT THIS 42 year old WRONG!

• Golf is not permitted as a client entertainment expense deduction

• All competing industries are allowed a 50% deduction• The Income Tax Act influences businesses to avoid golf• Golf is one of the best client entertainment options• Golf courses cannot sustain this unfairness any longer• We demand an equal 50% allowable business expense

deduction• Once fixed, more corporate golf will be played

ENTERTAINMENT EXPENSE LOBBY

2013 Federal Budget Update

• 2013 Budget did not address business golf

• Continued effort required

• Did remove tariff on golf equipment

ENTERTAINMENT EXPENSE LOBBYStrategy

• Persuade Finance MinisterFlaherty to amend the Tax Act

• NAGA leadership on behalf of entire golf industry

• Impact Public Affairs engaged to manage the lobby

• Golf Awareness Days on Parliament Hill

ENTERTAINMENT EXPENSE LOBBYStrategy• Supporting media campaign

• Meet with all MPs individually

• Pre-budget consultations with Dept of Finance

• Chamber of Commerce & CFIB support will now be engaged

ENTERTAINMENT EXPENSE LOBBYKey Messages

• Golf is a vital industry, not just a great game• 6 million golfers; #1 participation sport• 70 million rounds played; 2500 golf courses• $11.3 billion direct economic impact ($37 billion indirect)• 155,000 direct employment (340,000 indirect)

• 43% are students• $3.1 billion in total property & income tax• Over $400 million in charity fund raising• Golf businesses are small businesses; 52% less than $1.5

million gross

ENTERTAINMENT EXPENSE LOBBYKey Messages• Golf deserves equal and fair treatment• Tax Act singles out golf at 0% deduction• All other recreation/entertainment/hospitality industries

are 50% deductible• Examples: NHL, CFL, NBA, MLB, theatre, skiing, tennis,

restaurants• Accountants advising businesses to use NHL, etc instead

of golf due to tax disadvantage• Golf can’t compete fairly without level taxation playing

field

ENTERTAINMENT EXPENSE LOBBYKey Messages

• Income Tax Act is supposed to be built upon fairness• Golf is a better tool for building client business than any other• Not right that the Tax Act penalizes one small business sector• Golf courses have had declining corporate revenues• Not asking for a tax break for golf courses; deduction applies to

the business paying for the client• IRS in the USA treats golf equally to all competing industries• Golf is not an elitist sport; avg 18 hole green fee is $35• Golf courses today far different than 1971 tax reform decision of

0% for golf

ENTERTAINMENT EXPENSE LOBBYOur ‘ASK’

• Amend section 18.1 of Income Tax Act to include golf at 50%

• Golf will then be treated fairly with all competing industries

• Applies to guest fees and cart rental only• Does not apply to memberships • Incremental golf will be played by the corporate sector• Employment, taxation and overall growth in golf industry

will be stimulated

ENTERTAINMENT EXPENSE LOBBYPotential Objections• Why not eliminate tax deductions for all businesses?• Yes, that would correct the unfairness, but not realistic• Entertaining clients is a critical cost of developing business• Would discourage anyone from opening a business in Canada• We’d lose most NHL teams & many other entertainment

industries• Flaherty on record saying he wouldn’t do so• Just a ‘red herring’…return to the real discussion of the need for

50%• All growth in golf industry will be stimulated

ENTERTAINMENT EXPENSE LOBBYPotential Objections• Won’t it cost Gov’t too much when we’re trying to

balance budget?• Projected net lost tax revenue is $20 million• To Flaherty’s $260 billion budget, it is insignificant,

basically revenue neutral• Incremental golf played will drive additional tax

revenues• To the golf industry, the incremental gross revenues will

be a huge impact

ENTERTAINMENT EXPENSE LOBBYYour Role

• Meet with your own MP

• State the case for golf deserving fair tax treatment

• Tell the MP that we are meetingwith all 308 MPs across Canada

• Use your own business as a local example within that riding

ENTERTAINMENT EXPENSE LOBBYYour Role

• Request a letter of support from MP to Flaherty

• Request that the MP follow up with a conversation with Flaherty

• Request ongoing support from the MP

• Report meeting outcome back to Impact Public Affairs

ENTERTAINMENT EXPENSE LOBBY

• Download your Grass Roots Advocacy Kit at• www.ngcoa.ca or www.canadagolfs.ca • Consult with Jeff Calderwood or other NAGA

directors or Impact Public Affairs

Supporting Material

Thank You

All the best for the 2013 season!

Jeff Calderwood, CEONGCOA Canada613-226-3616

[email protected]