If you own a business in Florida and you own your home, there is a provision in the Internal Revenue Code that most business owners have never heard of — and it may be one of the most straightforward tax strategies available to you right now.
It is called the Augusta Rule. It is legal, it is codified, and it is consistently overlooked.
What Is the Augusta Rule?
The Augusta Rule takes its name from Augusta, Georgia — where homeowners have long rented their properties to visitors during the Masters Tournament, tax-free. The rule itself is codified in IRC Section 280A(g), and it allows any homeowner in the United States to rent their personal residence to their business for up to 14 days per calendar year and exclude that rental income entirely from their gross income.
You pay zero federal income tax on that rental income. Your business, however, deducts the full rental expense.
Read that again: the income is tax-free to you personally, and the business deduction is fully legitimate.
How It Works in Practice
Here is a practical example for a Florida business owner:
Your LLC or S-Corporation holds a quarterly strategy meeting, a team planning session, or a client training event at your personal home. Before the meeting, you research what a comparable venue — a hotel conference room, a co-working meeting space, or a banquet room — would charge for the same event. That is your benchmark for fair market value.
Your business pays you, the homeowner, that rental rate. The business records the expense as a venue or meeting cost. You deposit the payment into your personal account. You owe no federal income tax on that income.
At $1,500 to $3,000 per event across four quarterly meetings per year, you are looking at $6,000 to $12,000 of tax-free personal income paired with a legitimate business deduction — simultaneously.
The Requirements You Cannot Skip
The Augusta Rule is not a gray area — it is statute. But like any tax provision, it must be applied correctly to withstand scrutiny. Here are the non-negotiable requirements:
- Your business must be a separate legal entity. The strategy requires your business (LLC, S-Corp, C-Corp) to pay you, the individual homeowner. It does not apply to sole proprietors paying themselves informally.
- The rental must be for a legitimate business purpose. Meetings, planning sessions, training events, and board meetings all qualify. Personal gatherings do not.
- The rate must reflect fair market value. Document comparable venue pricing in your market. If a comparable meeting space rents for $500/day in Orlando and you charge your business $2,000/day, that rate will not hold up. Be accurate and document it.
- You must stay at or under 14 days per year. Exceed 14 days and the income becomes taxable. Track this carefully.
- Documentation is everything. Agendas, sign-in sheets, meeting notes, invoices, and comparable rental data. If you cannot document the meeting occurred and the rate was reasonable, you cannot defend the deduction.
A Note on Florida Business Owners Specifically
Florida has no state income tax, which already gives Florida business owners an advantage. The Augusta Rule adds a federal layer on top of that advantage — generating federally tax-free income within a state that already taxes it at zero percent. For Florida business owners operating structured entities, this strategy is particularly powerful.
Common Mistakes to Avoid
The most common errors we see when business owners attempt to use this strategy without proper guidance:
- Using it in a sole proprietorship (does not qualify)
- Not documenting the business purpose of the meeting
- Charging a rate that is not supported by market comparables
- Exceeding 14 days and not tracking usage across the year
- Not issuing a proper invoice from the homeowner to the business
The Bottom Line
The Augusta Rule is one of several tax provisions that business owners routinely miss — not because it is secret, but because no one told them it existed. It is written in the tax code. It has been used for decades. And with proper documentation and a structured business entity, it is available to you.
At 360 Global Business LLC, we work with business owners across Florida and nationwide to identify and properly implement strategies like this one. Our approach combines 27 years of federal tax experience with the precision that comes from treating every client’s return as a business-critical document.
If you would like to discuss whether the Augusta Rule applies to your situation, contact our office at 1-855-500-1514 or email info@360globalbusiness.com.
This article is for educational purposes only. Individual tax situations vary. Consult a qualified tax professional regarding your specific circumstances.
Shannon C. Williams is a Federal Tax Educator and Founder of 360 Global Business LLC — a full-service tax, accounting, bookkeeping, and payroll practice based in Orlando, Florida.