Managing the Financial Side of Commercial Fleets

De Minimis Entertainment - Where Does it Cross the Line?

Fleet drivers use company vehicles for more than one reason, including entertainment. Most companies have a policy covering entertainment. Does it clash with what company drivers are doing?

March 2013, by Staff

Travel and entertainment, or T&E, is one of those accounting entries that sometimes takes on a life of its own. Drivers of company vehicles, particularly cars and SUVs/crossovers, are given those vehicles to sell, or service, the customers. And, part of that process is entertainment; spending time away from the office with customers and prospects.

Entertainment takes many forms; meals, sporting and cultural events, perhaps a drink at a bar. Most companies have some sort of policy governing entertainment; what is permitted, what isn’t, and examples of both. Two items are of most concern to companies: First, are expenses deductible under IRS rules? And, second, what level of entertainment (cost) is acceptable? It is the second question that will be addressed.

Entertaining Customers

Entertaining customers has been a key part of doing business for as long as business has been conducted. Buyers, for the most part, expect it (at various levels); sellers expect to have to do it to remain competitive. Regardless of the form it takes, entertainment helps build relationships, gets the customer away from the distractions of the office, and breaks down barriers to doing business.

That said, entertainment can, if uncontrolled, get out of hand not only in gross cost, but also if it is not tax deductible. For that reason, most companies have a written policy governing what is and isn’t acceptable.

There are those entertainment expenses that are the “norm” — to the extent there is a norm. Meals (taking a customer to lunch or dinner), going to a ball game, even a round of golf are seldom, if ever, questioned. The term de minimis is often used for such entertainment; those activities that are considered in the normal course of doing business.

Is there a point where the chosen entertainment crosses the line from de minimis to excessive, specifically as it pertains to the company entertainment policy? That, of course, depends upon what that policy is, what it defines (and what it doesn’t), and how that policy is applied.

Some companies have very detailed and specific travel and entertainment policies, while others are vague and/or simple. The IRS rules for the deductibility of entertainment expenses are vague, but hardly simple. Corporate policy that mirrors that vagueness allows for a bit of judgment on the part of management.

Twitter Facebook Google+


Please note that comments may be moderated. 
Leave this field empty:

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.


Fuel Management

Bernie Kanavagh from WEX will answer your questions and challenges

View All


Fleet Tracking And Telematics

Todd Ewing from Verizon Connect will answer your questions and challenges

View All


Fleet Management And Leasing

Jack Firriolo from Merchants will answer your questions and challenges

View All


Sponsored by

A plug-in electric hybrid (also called plug-in hybrid] is a hybrid vehicle that can be recharged via a regular household electric socket.

Read more


Market Trends

Mike Antich
Using Performance-Based Incentives to Optimize the Cost-Effectiveness of Fleet Operations

By Mike Antich
A fleet cost reduction program goes straight to the corporate bottom line. If a company operates at a 10% annual net profit margin, reducing annual fleet expenses by $100,000 is the equivalent of generating $1 million in sales. Although fleet managers manage hundreds of thousands to tens of millions of dollars in corporate assets, only half are incentivized to achieve targeted performance goals. I advocate incentivization should be a universal best practice extended to all fleet managers.

Obstacles to Overcome Prior to a Volume Rollout of Autonomous Vehicles

By Mike Antich

View All

Driving Notes

Paul Clinton
2019 Mercedes-Benz Sprinter

By Paul Clinton
The 2019 Mercedes-Benz Sprinter is a significantly upgraded van that offers a dizzying array of configurations and meaningful improvements designed to improve productivity for delivering packages or hauling passengers.

2018 Ford EcoSport

By Mike Antich

View All

Nobody Asked Me, But...

Sherb Brown
Remembering Sundays in St. Louis, Detroit, and Atlantic City

By Sherb Brown
There is just no better opportunity to network, to learn, and to mingle with the best and the brightest than an in-person fleet event.

Adapting to a Changing Tide

By Sherb Brown

View All

In Memoriam: Coach's Insights

Ed Bobit
Thinking of the Newbies of the Future

By Ed Bobit
A lot has changed in the past 10-15 years, so we can only imagine this momentum will continue into the next decade-plus. How will this change impact the fleet manager of tomorrow?

Managing a Car vs. Work Truck Fleet

By Ed Bobit

View All


Up Next

More From The World's Largest Fleet Publisher