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golf as an allowable business expense

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 !. Golf is not permitted as a client entertainment expense deduction

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golf as an allowable business expense

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  1. ENTERTAINMENT EXPENSE LOBBY golf as an allowable business expense Presented by: Jeff Calderwood, CEO NGCOA Canada

  2. Entertainment Expense Lobby Now is the time to RIGHT THIS42 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

  3. Entertainment Expense Lobby 2013 Federal Budget Update • 2013 Budget did not address business golf • Continued effort required • Did remove tariff on golf equipment

  4. Entertainment Expense Lobby Strategy • 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

  5. Entertainment Expense Lobby Strategy • Supporting media campaign • Meet with all MPs individually • Pre-budget consultations with Deptof Finance • Chamber of Commerce & CFIB support will now be engaged

  6. Entertainment Expense Lobby Key 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

  7. 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

  8. Entertainment Expense Lobby Key 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

  9. 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

  10. Entertainment Expense Lobby Potential 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

  11. 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

  12. Entertainment Expense Lobby Your 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

  13. Entertainment Expense Lobby Your 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

  14. 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

  15. Thank You All the best for the 2013 season! Jeff Calderwood, CEO NGCOA Canada 613-226-3616 jcalderwood@ngcoa.ca

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