Full question:
My daughter is 13. She has a few large companies interested in Sponsoring her in her equestrian sport. she is willing to acknowledge them by displaying their logos on polos, trailer, etc.... Does she need a tax ID? A special account? Can these companies get a tax break for marketing, since she is not a charity or non-profit? We have already prepared a cover letter, proposal and a budget. Now what?
- Category: Corporations
- Subcategory: Sponsorships
- Date:
- State: California
Answer:
Many businesses engage in sponsorship as a form of advertising. When companies sponsor events or individuals, they often seek to enhance their visibility and public relations. If your daughter is displaying company logos, it can be considered corporate sponsorship rather than a charitable contribution.
Regarding tax IDs, your daughter may need to obtain a tax identification number (TIN) if she is receiving sponsorship payments. This is often necessary for tax reporting purposes. Additionally, opening a separate bank account for any sponsorship funds can help keep finances organized.
As for tax breaks, companies can typically deduct sponsorship expenses as advertising costs, even if your daughter is not a charity or non-profit. However, the specifics can vary, so it’s advisable for the sponsoring companies to consult a tax professional to understand the implications fully.
Since you have prepared a cover letter, proposal, and budget, the next step is to formally reach out to the interested companies. Present your proposal and discuss the terms of the sponsorship, including how they will be acknowledged.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.