January 01, 2001
Meetings & Conventions: Planner's Portfolio January 2001 Current Issue
January 2001 lawandplan.gifPLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


If individuals pay for their own drinks, can the host be held responsible for their actions?

Q: Our company does not sponsor or serve alcohol at meetings. However, we do have cash bars available at most major functions. As a matter of policy, I insist the cash bar not be near or in the function area, and no liquor is charged to the company. It is up to individuals to pay all liquor charges. Given these circumstances, does the company still have potential liability of any kind?

Buddy Cort
Regional Event Planner
Company Name Withheld
Birmingham, Ala.

A: Unfortunately, you might. Two legal concepts come into play. First, if you are in a state with laws in place concerning host liquor liability, even though you are having the hotel provide the liquor at a cash bar, your organization remains the entity that seems to have sponsored the cash bar. The key, though, is to shift the responsibility to the venue.

To make the shift, put in your contract that if any alcohol is served, consequences are the responsibility of the server. Then have the facility’s representatives sign off that they will indemnify your organization against any liquor liability. Hospitality- suite sponsors should sign off on this, as well.

The second doctrine deals with what lawyers call respondeat superior the employer is responsible for the acts or omissions of the employee arising out of and in the course of employment. Thus, as noted in “ ’Tis the Season to be Liable” (The Law & the Planner, December 1996), dealing with a decision in Florida, there was a responsibility on the part of the employer to properly supervise the employee. Failing to do so, the employer was liable for the drunk driving of an employee. The keys here are good contract clauses and responsible drinking policies.

Q: What are current tax laws for off-site programs? Must the meeting be 50 percent work-driven in order to be tax free? Do weekends matter?

Louise Felsher, CMP
Managing Director
Strategic Programs
Certive Inc.
Redwood City, Calif.

A: First, it’s not a question of a meeting being tax free; it’s a question of whether the meeting meets the criteria for purposes of deducting the expenses incurred. Second, it’s really not a 50 percent time requirement, though that’s not a bad model. And as for weekends, have fun so long as you do business on Friday and the next Monday.

The key words in any tax situation are “trade” and “business.” Was the meeting called and conducted to advance the “trade or business” of the organization that is claiming the deduction? That must be the primary purpose of the meeting.

Thus, the notion that 50 percent of the time spent must be in meetings or businesslike activities is misplaced. What is key is the intent of the program, its operation and the reason people are there. If it is business, fine. If it’s fun and frolic, no write-off.

Collateral materials and the like should always emphasize the “trade or business” aspect of the taxpayer claiming the deduction. But if most of the time is spent in nonbusiness activities, the Internal Revenue Service probably will challenge the deduction. The key again is the structure of the program people attending for purposes of advancing their trade or business and that can be done on the golf course, as well. Note, though, in such situations, the basic rules dealing with meals and entertainment will come into play, which will limit the deduction to 50 percent of those charges.

Jonathan T. Howe, Esq., is a senior partner in the Chicago and Washington, D.C., law firm of Howe & Hutton, Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at askhowe@cahners.com.

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