ENTERTAINMENT EXPENSE LOBBY
GOLF AS AN ALLOWABLE
BUSINESS EXPENSE
Presented by: Jeff Calderwood, CEO
NGCOA Canada
ENTERTAINMENT EXPENSE LOBBY
Now is the time to RIGHT THIS 42 year old WRONG!
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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 LOBBY
Strategy
• Persuade Finance Minister
Flaherty 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 LOBBY
Strategy
• 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 LOBBY
Key Messages
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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 LOBBY
Key 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 LOBBY
Key Messages
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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 LOBBY
Our ‘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 LOBBY
Potential Objections
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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 LOBBY
Potential 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 LOBBY
Your Role
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Meet with your own MP
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State the case for golf deserving
fair tax treatment
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Tell the MP that we are meeting
with all 308 MPs across Canada
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Use your own business as a local
example within that riding
ENTERTAINMENT EXPENSE LOBBY
Your Role
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Request a letter of support from MP to Flaherty
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Request that the MP follow up with a conversation with
Flaherty
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Request ongoing support from the MP
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Report meeting outcome back to Impact Public Affairs
ENTERTAINMENT EXPENSE LOBBY
Supporting Material
• 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
Thank You
All the best for the 2013 season!
Jeff Calderwood, CEO
NGCOA Canada
613-226-3616
[email protected]