Saturday, June 12, 2010
You can deduct some lobbying expenses.
I am a professional Lobbyist in New Mexico. I am constantly asked by legislators for contributions to their campaigns. Is there any way to deduct the checks I write to the legislators I lobby as this is a cost of doing business? I have been self employed since 2006. I have never deducted these payments but am ever hopeful I can someday.
Las Cruces, NM
If you are making a political contribution it is not deductible -- neither as a business nor a personal expense.
Here's some info on deductible lobbying expenses that I think will be useful to you when talking with colleagues:
Lobbying is often thought of as a derogatory term.
Stripped of its negative connotations though, lobbying just means attempting to influence government legislation or policy. And there's nothing wrong with that. Having access to government and being able to influence its officials is an important factor in a democracy. It's just as important for a self-employed IT consultant as it is for an industry giant.
Tax laws are written for the corporate world and need to be carefully interpreted to fit the business life of a solo entrepreneur. Lobbying is a case in point.
Just about everything you read on the kinds of business deductions allowed for lobbying starts with this opening sentence: "Generally, lobbying is not deductible as a business expense." This is usually followed by a list of the lobbying expenses that cannot be deducted, such as: costs for contacting the president or for trying to influence the views of the vice president. And often the writer stops there.
But that's misleading, and here's why.
Most indies have little to do with attempts to influence the president or the vice president. On numerous occasions, however, they try to be heard on a local level. And as far as the issues that come up at the Mayor's Office or at the city council meeting are concerned, an indie business can deduct lobbying expenses.
If the local government is planning a zoning change that would be detrimental to your business, or if you want the city council to allow home businesses in the area in which you live, or if you're a restaurateur opposed to their proposed ban on smoking or live music -- all such efforts are deductible. You can argue with the building inspector, attempt to be arrestingly persuasive with the police chief, and exchange heated views with the fire marshal, and you can deduct all the expenses incurred.
To learn what is deductible and for some specific examples of indie situations continue reading here at my column for New Mexico Business Weekly on Lobbying Expenses