Trade shows are one of the most lucrative ways to launch new products, increase brand visibility, and move customers through your marketing and sales funnels.
However, the costs of organizing a trade show exhibit adds up quickly. Luckily, you can deduct many trade show expenses when it’s time to submit your tax return. Here are the most common expenses and tax deductions when participating in exhibits.
These are the fees trade show organizers charge to register space at a venue. The amount you pay depends on the event, of course, but expect to hand over anything from a couple of hundred dollars to thousands of dollars.
Registration fees, in most circumstances, will take the biggest chunk out of your trade show budget. Research from the Tradeshow Institute suggests that renting floor space and creating your own exhibit accounts for 40 percent of all trade show costs.
Some venues charge you more money for a more prominent position in a convention center — setting up a trade show booth near the main door, where most footfall will occur can cost you a pretty penny. Other venues will charge you more if you register nearer to the event (when spaces become limited).
Then, there are the other fees associated with exhibiting at a trade show. These include electricity, carpeting, a lead scanner and everything else related to getting your booth ready. This expenses can also set you back hundreds of dollars if not thousands.
The good news is that you can deduct trade show registration fees and other expenses from your tax return at the end of the financial year.
Most medium-sized cities host trade shows at least once or twice a year. However, if you want to attract more valuable customers and network with industry influencers, you might need to travel further afield.
Research shows that most trade shows take place in Las Vegas, Nevada. Orlando, Florida, and New Orleans, Louisiana, are two other cities where trade shows take place throughout the year. Traveling to these cities (or other places across the United States or beyond) is not cheap. Traveling by car to Las Vegas, for example, could cost you hundreds of dollars in gas. If you don’t stay close to the convention center, you might need to drive to and from a hotel, too.
Calculate the cost of your round trip to and from your trade show venue and, if you’re eligible, deduct the cost of gas from your next tax return.
Air, Bus, and Train
Like gas, the cost of air, bus, or train travel to and from your trade show will set you back some serious cash.(A round trip airfare from Los Angeles to Las Vegas can cost hundreds of dollars!)
But that’s not the end of it.
The Las Vegas Convention Center, for example, is four miles from McCarran International Airport, so you’ll need to pay for a bus or taxi fare — if you’re not going to your hotel first, that is.
Alternatively, you might want to travel by train to your trade show. City-to-city tickets on Amtrak cost $20-$400 one way, depending on total distance — another cost you need to factor into your trade show budget.
Most trade shows take place over two or three or more days. (The NCAS Show, the biggest trade show in the U.S., takes place over four days.) This means you need somewhere to stay if you’re traveling from afar.
Hotels are most popular with trade show exhibitors as they are located close to convention centers in most cities. However, hotel rooms can be expensive, especially during busy trade show weekends when thousands of people visit. The average cost for overnight accommodation in Orlando in July (the middle of the trade show season), for example, is $140.
You could, however, deduct the cost of hotel accommodation from your tax return at the end of the financial year. Not many people know this, but you can also deduct the cost of tips for hotel and dining staff.
Many trade shows provide food and beverages for both visitors and exhibitors, but prices can be expensive. Moreover, convention centers are sometimes located near airports or busy highways where meal options are limited.
Don’t worry, though. Wherever you choose to eat and drink, you could deduct 50 percent of your meal expenses from your tax return. In some circumstances, the Internal Revenue Service (IRS) will let you write off a larger percentage of your meal expenses, too.
Trade shows provide you with the perfect opportunity to network with industry influencers and authority figures in your niche. Capitalize on this opportunity and you could secure new deals and business partnerships. Entertaining important guests, however, doesn’t come cheap. You might want to take out a client to dinner, for example, or throw a party for influencers in your industry.
The same IRS rules apply for entertainment as they do for food. You can, if eligible, write off 50 percent off your entertainment expenses from your tax return — and even more, in some circumstances. This IRS rules apply for all costs related to entertaining guests, including hosting parties and other events.
Trade show success doesn’t happen on the day but in the weeks and months leading up to the big event. Emails, videos, paid-for ads, social media campaigns — all of these marketing methods will promote your trade show and lure more people to your booth.
Trade show marketing, though, costs money. You might need to invest in analytics tools and other types of marketing software. You might want to pay for adverts on search engines or social media platforms. Then there are the costs associated with trade show follow-up — sending out thank you notes to people who attended your booth, for example.
You could deduct all of these marketing costs at the end of the fiscal year. This will let you plan bigger trade show marketing campaigns that drive business growth.
Why You Need to Keep Receipts
The fact that you can claim back many trade show expenses from your tax bill is all very well and good, but you need to prove it. Make sure you keep all your receipts — restaurant checks, hotel invoices, ticket stubs, booking passes, you name it — physically or electronically to support your tax return. The IRS could ask you for these documents at any time.
Planning a trade show? It could cost more than you think However, you could make deductions for any expenses you incur when it’s tax time. Remember to keep receipts for the expenses above and you could organize a successful trade show without breaking the bank.