If I rent a venue to host a client appreciation dinner, is the cost of the venue rental tax-deductible?

Yes, the venue rental is deductible, though only at 50% because of how the IRS treats business meals and entertainment expenses.

Here's the reasoning. The Tax Cuts and Jobs Act of 2017 eliminated deductions for most entertainment expenses entirely. However, meals that are directly connected to your business, including a client appreciation dinner, still qualify for a 50% deduction. The venue rental cost is considered part of the meal expense when the purpose of the event is dining and business relationship-building, so it gets the same 50% treatment rather than being written off completely.

To keep this deduction clean, document a few things: the business purpose of the event, who attended, and that food and beverages were the main feature rather than entertainment. If the evening also includes something like a band or a show, the IRS could characterize more of the cost as non-deductible entertainment, so it helps to keep those elements clearly separate if you invoice them that way.

One practical note: if you're invoiced separately for the venue, catering, and any entertainment, allocate each cost carefully. The catering and venue rental tied to the meal are 50% deductible. A purely entertainment component would be 0% deductible under current law.

Keep your receipts and a brief written record of the attendees and business purpose. That documentation is what protects the deduction if you're ever questioned.