Can You Write Off Season Tickets on Taxes?

Season tickets for sporting events or other entertainment venues are often associated with both personal enjoyment and business dealings. Many people wonder if these expenses can be written off on taxes, a question that has become more complex due to significant changes in tax law. Understanding the current tax landscape for these types of expenses is important for individuals and businesses alike.

General Rules for Entertainment Expenses

Under Internal Revenue Code Section 274(a)(1), expenses for entertainment, amusement, or recreation are not deductible. This means the cost of tickets to sporting events, concerts, or other entertainment venues, including season tickets, purchased for client entertainment or similar business development purposes, is not deductible.

However, the rules for business meals differ from entertainment expenses. While entertainment is no longer deductible, business meals may still be 50% deductible. To qualify, the meal must be an ordinary and necessary business expense, meaning it is common and helpful to the business. It must not be lavish or extravagant, and the taxpayer or an employee must be present when the food and beverages are provided.

The meal must also be provided to a current or potential business customer, client, consultant, or similar business contact. This 50% deduction applies only to the cost of the food and beverages. If food and beverages are provided during an entertainment event, their cost must be purchased separately from the entertainment or be stated separately on bills or invoices to be deductible. The cost of the entertainment, such as the season tickets themselves, remains non-deductible.

Situations Where Season Tickets May Be Deductible

While direct entertainment expenses for season tickets are not deductible, specific and narrow circumstances may allow for a deduction, depending on the primary purpose of the expense.

If season tickets are part of a legitimate advertising or sponsorship agreement, their cost may be deductible as an ordinary and necessary business expense under Internal Revenue Code Section 162. This applies when the primary purpose is promoting the business, such as displaying the company name at the venue or using a corporate suite for business development activities. The intent must be to generate income or enhance brand visibility, rather than simply entertaining clients.

Season tickets may also be considered in limited employee benefit scenarios, though this is rare due to their value. For instance, tickets could qualify as a “de minimis fringe benefit” under IRS Regulation 1.132-6 if their value is so small that accounting for it is unreasonable or impractical. Examples of de minimis fringes include occasional theater or sporting event tickets, but season tickets do not meet this low-value threshold. Season tickets also do not qualify as “employee achievement awards” under Internal Revenue Code Section 274(j), as these awards must be tangible personal property for length of service or safety achievement, and tickets to sporting events are explicitly excluded.

A charitable contribution may also involve season tickets. If an individual donates to a qualified charitable organization and receives season tickets as a benefit, only the amount of the contribution exceeding the fair market value of the tickets is deductible. For example, if you pay $1,000 for a donation and receive tickets valued at $300, only $700 is deductible. When a contribution to a college or university grants the right to purchase athletic event tickets, the charitable deduction is limited to 80% of the total amount given. If a business donates season tickets to a qualified charity, the fair market value of the tickets at the time of donation could be deductible as a charitable contribution, subject to annual income limitations.

Required Records

Maintaining records is essential to support any tax deduction claims related to season tickets. These records serve as evidence for the Internal Revenue Service (IRS) to substantiate your expenses. Without proper documentation, claimed deductions may be disallowed during an audit.

For any deductible business meal expenses, records are required. You must document the amount paid, the date of the meal, the place, and the business purpose of the expense. It is also necessary to record the business relationship of the people entertained during the meal. This documentation should include receipts, invoices, and a log or calendar entry detailing these specifics.

If season tickets are claimed as part of an advertising or sponsorship arrangement, comprehensive documentation is important. This includes written contracts outlining the advertising components, invoices detailing the specific services provided, and evidence of the business promotion. These records help demonstrate that the primary purpose of the expense was for advertising and not entertainment.

For charitable contributions involving season tickets, you must obtain a written acknowledgment from the qualified charitable organization. This acknowledgment should state the amount of your contribution and, if any goods or services (like tickets) were received, a good faith estimate of their fair market value. You can only deduct the amount that exceeds the value of the benefit received. Taxpayers should generally retain records for at least three years from the date the tax return was filed, or up to six years in case of an IRS audit.