Tax talk: Breweries can’t fully deduct non-profit/trade group memberships if those organizations do lobbying efforts

Hey sexy, if you didn’t know: Section 162(e) of the Internal Revenue Code disallows a tax deduction for lobbying expenditures. What do you care, right? You’re not wasting your precious moments lobbying those bozos in government, right? (If you are, high five!) Well, if you belong to a non-profit trade group, they may well be doing lobbying on your behalf. And while you might have bought that tax-deductible membership for the killer trade events, networking gigs, education opportunities and that rad magazine you love, you’re still not supposed to deduct your entire membership if that group lobbies.

The Brewers Association recently mailed brewery members a letter regarding percentage of dues that are not tax deductible due to lobbying activities. Section 162(e) of “The Code” defines lobbying, and it also notes that tax-exempt organizations either have to pay a proxy tax on lobbying expenditures or inform their members that a portion of their membership dues are non-deductible as a result of those expenditures. Last year, the Brewers Association did lobbing efforts that were mostly focused on educating elected federal representatives and senators and their staffs on the merits of excise tax recalibration bills H.R. 2903 and S. 1562. Both damn good bills.

From the BA’s site:

Your dues payment as a business expense for the year 2016 will be limited by the percentage of dues that went towards supporting lobbying activities, and only the remaining portion of your dues can be claimed as an expense on your federal tax return.

For 2016, the percentage of non-deductible dues pertaining to your tax return is 11.7%.

Now you know, and knowing’s half the battle.