Primary Business Purpose Defined

What Is Primary Business Purpose?

Primary business purpose is a phrase denoting that the main intent of traveling out of town was to transact business. This trip may be combined with pleasure, but the primary purpose of the trip must be for business. If the business element of the trip were removed, the trip would not be taken.

Understanding Primary Business Purpose

As long as the primary business purpose can be proven, the taxpayer may deduct all transportation and lodging costs, as well as 50% of meal expenses in their income tax filings. This can be done even though part of the trip is for pleasure. However, if the main purpose of the trip is pleasure, then no expenses of any kind are deductible.

Generally, the amount of time spent pursuing business versus pleasure activities is the determining factor in establishing a primary business purpose. Keeping a log to document business activities is usually acceptable proof of business purpose in the event of an audit by the IRS.

What Constitutes a Primary Business Purpose

Travel for company meetings, for instance, to confer with personnel at a site outside of one's primary place of business or work would qualify as a primary business purpose. This can include annual or seasonal meetings for planning and strategy sessions. Meetings for audits and other assessments of company operations would also be categorized as a primary business purpose.

Taking trips to meet with clients and potential customers can also constitute a primary business purpose for travel. For example, taking a flight for a sales meeting to pitch a company's products and services would qualify. The trip might also be for an inspection of the company's facilities and operations at a remote location. This classification would cover travel to oversee the development or opening of a new facility, as well as to conduct the closure and shuttering of a location.

Meetings with local officials that have some engagement with the business, such as regulatory issues, policies, or licensing needs, also can be counted as primary business purposes. Visiting clients for planning sessions or to collaborate on projects, as well as to conduct interviews or other interactions related to the business all fall within the scope of this use case. Likewise, if the excursion included entertaining the clients with meals, those costs would also be inclusive of a primary business purpose.

Travel costs to attend conferences and conventions associated with one’s business activities fall within these guidelines as well. This can also include expenses to and from airports and taxi fare around the city where the business event is being held.

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  1. Internal Revenue Service. "Publication 463 (2020), Travel, Gift, and Car Expenses," Pages 10-12. Accessed Aug. 12, 2021.

  2. Internal Revenue Service. "Publication 463 (2020), Travel, Gift, and Car Expenses," Pages 24-25. Accessed Aug. 12, 2021.

  3. Internal Revenue Service. "Publication 463 (2020), Travel, Gift, and Car Expenses," Page 5. Accessed Aug. 12, 2021.

  4. Internal Revenue Service. "Topic No. 511 Business Travel Expenses." Accessed Aug. 12, 2021.