So, we’ve written a number of articles about the pros and cons of trade show rentals vs purchasing your trade show booth – but one area we’ve only briefly touched on is the business end of both. Sure, you can have a great looking exhibit, whether you choose to rent or purchase your trade show booth – AND depending on how many shows you attend each year both choices have their merits.
Purchasing Your Trade Show Booth is a Capital Expenditure
That being said, what about capital expenditure? If you choose to rent your custom trade show booth, it will go down in the books as an operating expense (in the calendar year the rental is paid for). However, if you decide that purchasing your trade show booth is the best option – understand that this is a capital expense and must be tracked and depreciated over time.
Accounting and Your Trade Show Booth
The latter choice, capital expense, comes with a bit of accounting baggage (and additional cost) as it must be tracked and depreciated over time.
Typically with a capital expense, the investment must be accounted for and written off over their useful life. This period is typically three, five or seven years according to the IRS. So, there are tax impacts to making a capital investment vs the one-time operating cost of renting your exhibit.
Understand the Pros and Cons Before You Decide
Whether you choose to rent or purchase your trade show exhibit will be determined by many factors, including:
- The number of shows you attend each year
- How often your booth design must change
- The audiences you exhibit to
- And whether you exhibit at multiple shows at the same time
But how your investment or operating expenses affect your bottom line and taxes should be taken into consideration as well.
Have questions about how renting your trade show booth may help you avoid making a capital expense? Give the seasoned pros at ColorCraft a call – we’ve got the answers to help you navigate the best choice for your company’s trade show marketing budget!
