What is Promotion Expense?
Promotion expense is the cost of items given away to customers. The intent behind issuing these items is to eventually increase sales. The cost of these actions can then be deducted as a business expense; it is usually classified as a marketing expense. The amount of promotion expense is the cost of the goods or services given away; it is not the market value of these items.
Promotion expense is a valid tax-deductible expense on an organization's tax return.
Examples of Promotion Expenses
Examples of promotions are handing out free product samples or offering a free snow removal to the consuming public. Or, a baker may hand out a free donut on a particular holiday, in order to attract new customers.
