Meetings & Conventions: Planner's Portfolio January
The Law & the Planner
By Jonathan T. Howe,
LIABILITY LAWS GOVERNING A CASH BAR
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?
Regional Event Planner
Company Name Withheld
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
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
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 email@example.com.
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