Luxury wedding rentals operate like a logistics firm and a design studio at the same time. Your tax approach has to respect both: heavy capital spend on durable inventory (sofas, bars, lounge sets, dining tables) plus high-touch services (delivery, setup, styling). Here is a concise playbook to protect margins and cash flow while staying compliant.

1) Depreciation That Matches Wear-and-Tear

Most rental furniture fits into 7-year MACRS; props/lighting may be 5-year. Choose methods that reflect how quickly your pieces age.

• Bonus vs. Section 179: Model federal/state impact (many states decouple). Use 179 carefully if income is low.Bonus vs. Section 179:
• Partial dispositions: When a sofa or bar is trashed or sold, record a retirement to stop depreciating ghost assets.Partial dispositions:
• Ledger discipline: Keep in-service dates, class lives, warehouse tags separate from the design catalog.Ledger discipline:

2) Rental Property vs. Inventory

Chairs, sofas, bars, and arches rented repeatedly are capital assets—not resale inventory. Avoid pushing them through COGS.

• Consumables: Linens, candles, cleaning supplies can often be expensed; set thresholds and a written policy.Consumables:
• Refurbs: Upholstery refresh and repainting are usually repairs; structural rebuilds lean toward capitalization.Refurbs:

3) Sales Tax, Use Tax, and Sourcing

Rental tax rules differ by state: some tax the rental charge; others tax your original purchase (use tax) and exempt the rental.

• Nexus mapping: Warehouses, delivery routes, and frequent pop-up locations can create nexus.Nexus mapping:
• Bundling: Separate design/delivery from rental charges if your state taxes rentals to avoid over- or under-collecting.Bundling:
• Exempt purchases: If rental charges are taxed, your purchases may be exempt as “for rental”—keep certificates on file.Exempt purchases:

4) Deposits, Damage Waivers, and Insurance

• Security deposits: Not income if refundable; reclassify only when retained and offset with repair/replacement costs.Security deposits:
• Damage waivers: Often taxable where rentals are taxable. Treat as service income; keep terms clear in invoices.Damage waivers:
• Casualty losses: If insurance reimburses a destroyed piece, record gain/loss correctly and time replacements for cash flow.Casualty losses:

5) Logistics Costs and Per-Job Tracking

Delivery, setup, teardown, and overtime eat margins fast. Tag costs to jobs for pricing discipline.

• Fleet vs. outsource: Capitalize truck upfits; expense third-party freight appropriately.Fleet vs. outsource:
• Per-job tagging: Fuel, tolls, rush rentals, and overtime tied to events help reset minimum order thresholds.Per-job tagging:

6) Entity, QBI, and Payroll

• QBI: If your rental activity qualifies as a trade or business, the 20% deduction may apply (subject to wage/property limits).QBI:
• Reasonable comp (S corps): Owners who sell/design/drive must take reasonable wages before distributions.Reasonable comp (S corps):
• PTE tax elections: In high-tax states, consider pass-through entity tax elections to restore SALT deductibility.PTE tax elections:

7) Procurement Timing and Cash Flow

• Seasonality: Place big purchases before peak season to start depreciation sooner, but model income to avoid over-accelerating.Seasonality:
• Vendor terms: Compare early-pay discounts vs. conserving cash for labor and marketing before peak weekends.Vendor terms:

Disclaimer: Informational only, not tax advice. Work with a tax professional who knows your facts and the states where you operate.Disclaimer: