The IRS does acknowledge that advertising and promotional expenses are legitimate business activities and deductible for income tax purposes. Specifically, the IRS instructs, “You generally can deduct reasonable advertising expenses that are directly related to your business activities.” (1) Certainly, it is reasonable to deduct the expense to create an ad regardless of whether it will appear on a webpage, in a magazine or on a roadside billboard. But does that same logic carry to an ad placed on the exterior of a vehicle or trailer? Yes, it does. But before we get too excited, we need to differentiate between the cost of creating the ad and in the case of our RVs, the cost to transport our mobile “billboard”.
As noted above, the IRS allows a tax deduction for costs involved in creating an ad, regardless of where you use the ad, including the exterior of an RV. These costs include design work, materials, purchased labor and related services necessary to adorn your rig with your business advertisement. Unfortunately, the IRS disallows a deduction for other RV-related expenses (e.g. travel expenses) even though the RV is now a mobile advertisement. In other words, the ad does not change your use of the RV from personal to business, even if you wrap your entire RV in a giant advertisement.
In IRS Publication 463 we find that, “Putting display material that advertises your business on your car doesn’t change the use of your car from personal use to business use. If you use this car for commuting or other personal uses, you still can’t deduct your expenses for those uses.” (2)
For income-earning RVers whose only residence is their RV, the IRS confers the status of “itinerant”. This means travel in the RV can never be a deductible business event, it is always personal—even if your rig is wrapped in advertising. RVers who have a separate residence from their RV may already be able to deduct certain travel expenses so adding exterior advertising would not be a factor in determining what travel expenses may or may not be deductible. (3)