GBTA: T&E Deductions 'At Risk'

The Global Business Travel Association in a Jan. 14 letter cautioned members about "likely" corporate tax reforms in the United States this year and possible ramifications for the business travel industry. "Traditionally accepted business deductions, including the travel and entertainment tax deduction, remain at risk," wrote executive director Michael McCormick.

He suggested 2013 "will be a year for the business travel industry to be on guard and vigilant." For now, the "fiscal cliff" deal signed into law this month, according to McCormick, "provides our industry some certainty on taxes and preserves" T&E expense deductions.

Expenses for transportation to a destination, transport at a destination, meals, lodging, tips, phone calls and Wi-Fi, entertainment and other items typically are deductible for organizations taxed in the United States. If that benefit were removed in order to help the nation balance its books, business travel could take a serious hit.

The U.S. Travel Association represents travel suppliers. Director of domestic policy Erik Hansen said that while this is the first time he had seen GBTA addressing possible changes to T&E deduction rules, he wasn't surprised. "One of the things we've learned in this turbulent climate is that we should look out for any priority to be on the table," he said.

Hansen said that while both the government and private sector could "be smarter" in terms of managing travel, such across-the-board decisions as removing the deductibility of T&E expenses would have a "devastating" effect.

"It would mean Congress is choosing to increase revenue over job creation and expanding the economy," he said.

GBTA declined to indicate what prompted it to highlight the issue, other than to reference congressional plans to consider tax reform.

McCormick in a statement wrote that GBTA would advocate for tax reform that strengthens the business travel industry. "Reasonable business deductions, including the travel and entertainment deduction, remain vital to facilitating business travel growth," he wrote, "and we will fight to preserve this provision."