Now that Lobster Mini Season is almost here in Key West, a lot of local hotels, B&B’s, and Charter Boats are about to get a lot of extra business. What are the accounting implications to this?
First of all, we’re coming up on the slow season in Key West. Lobster Mini-Season helps out a lot of Key West small businesses with their cash flow, which is usually needed this time of year. For those business owners new to Key West, make sure to keep a conservative reserve because September is around the corner and that’s the slowest time of year in Key West.
Kick-backs and referrals. Not all of the local Key West economy revolves around Duvall St. There’s a lot of business taking place with local charter boats. A lot of charter boats rely on referrals from local hotels. Any kick-backs and referral fees given in exchange for referring someone is tax deductible. You can classify these as advertising expenses. On the flip-side, the hotel should count this a revenue.
Bartering. Not all financial transactions involve cash or currency. Sometimes individuals and businesses barter, and that’s perfectly fine as long as you report the transaction. There’s a lot of bartering that goes on in Key West during Mini Season, i.e. Lobster for a meal, Lobster for a ride, Lobster for a discount, Lobster for just about anything, lol.
Injuries. There’s always a spike in injury reports during Mini Season. Unfortunately, your injuries from lobstering are not tax deductible, lol.
Be safe everybody, and good luck.