This is a quick note but a worthy one. Businesses should be aware that employing cats to keep down rodent infestations is a tax deductible expense. Will this encourage some businesses to employ cats?
There is a precedent for what I have stated. In a United States Tax Court case, SAMUEL T. SEAWRIGHT AND CAROL A. SEAWRIGHT, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent (2001), the petitioner ran a family car parts business called Columbia North East Used Parts (Columbia). The case concerned working out Mr Seawright’s tax liability.
It was conceded by the Commissioner of Internal Revenue that cat food was a deductible expense which could be set against gross takings (gross income). To quote from the case:
On brief, respondent concedes that petitioners are entitled to a $300 business expense deduction for cat food that petitioners purchased and set out in their scrap yard for the purpose of attracting wild cats to deter snakes and rats.”
There you have it. Not much more to write about that. It is, in truth, a judgement based on common sense. But perhaps businesses who do have a cat or cats on the premises fail to consider the expense of looking after the cats as a business expense.
As far as I can tell, the participants in the case did not discuss other cat related expenses such as veterinary bills. Common sense also dictates that these expenses should be listed as legitimate business expenses to reduce the tax bill.
Come on now, let’s see some more businesses employing cats. There are plenty in shelters across America. Cats usually find living in a store (book shops especially) or a warehouse perfectly acceptable provided someone suitable is allocated the duty of caring for the cat or cats.
Link to transcript of the case referred to.