Are Vehicle Wraps and Graphics Tax Deductible?
Are vehicle wraps and graphics tax deductible? Before we begin, we need to add the quintessential disclaimer: We are not tax experts so before you deduct this expense, check with your tax advisor or follow up with someone who knows and understands the tax codes and how they relate to your business.
However, the tax experts claim this can be a valid tax write off, which sounds like a win-win to us. A tax deduction for attracting new customers!
Are vehicle wraps and graphics tax deductible?
So, are vehicle wraps and graphics tax deductible? In most cases, the cost of wrapping or decaling your fleet vehicles with an advertising design is tax-deductible. For example, suppose you hired a vinyl graphic provider to design, print, and install your company’s logo and contact information on your company vehicles. That’s an advertisement, and should be fully tax deductible, if the company owns the vehicle.
Company Vehicles vs Personal Vehicles
Only company-owned vehicles are eligible for tax deductions. Personal vehicles, even those with advertising graphics, don’t qualify. You can refer your tax advisor to IRS Publication 535 Business Expenses. The IRS clearly states that advertising graphics on personal vehicles aren’t eligible for tax deductions.
“Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses.”
However, advertising graphics can be a valid deduction for company-owned vehicles that market their products and services on business-owned cars and trucks.
Track Your Business Miles
If you track the business miles used as advertising, that may also be deductible. However, personal miles such as commuting to and from work aren’t deductible.
The Houston Chronicle, in their article, Tax Deductions for Advertising on Your Car, explained the difference.
“Adding a placard, sticker, or company license plate to your vehicle doesn’t mean you can write off full use of your car. Even though you might be tempted to argue that an advertisement makes every trip into a business trip, tax law will not be on your side. In 2010, the Internal Revenue Service took a dental practice to court when the full use of the car was reported as a qualifier for a deduction because of an advertisement. It was determined that the dental practice was not allowed to deduct 100 percent of the car expenses simply because of vehicle advertising.”
What Vehicle Graphics Qualify as an Advertising Write Off?
Any vehicle with advertising graphics that is owned by the company and seen by the public can qualify. Cars, trucks, and vans are apparent qualifiers, but it could be that a golf cart, motorcycle, or airplane might be eligible as well. Full wraps, partial wraps, and decals all count if they market the business. Sharing the company logo and contact information should be enough. To qualify for a deduction, you need documentation of your expenses. So, be sure to keep the receipt of your vehicle graphics expenditures.
Final Answer…Are Vehicle Wraps and Graphics Tax Deductible?
To sum up the question, are vehicle wraps and graphics tax deductible? In most cases the answer is yes. If in the past you’ve deducted other advertising expenses such as print ads, TV commercials, or business cards, then add fleet graphics to your list. Be sure to check with your tax consultant. However, when you do, we think you’ll be pleasantly surprised. Vehicle graphics have proven to be one of the most cost-effective forms of advertising, especially if your business can write it off!
If we can answer any questions about advertising on your fleet, or any other questions you have, don’t hesitate to Contact Us.
TKO Graphix is a national fleet and vehicle graphics company helping customers since 1985. We provide full-service graphics solutions such as design, digital printing, screen printing, installation and removal of fleet graphics, vehicle graphics, and commercial graphics.