For employees, corporate travel awards are generally treated as income and reported as such on the employee income statement. In the United States, a Form 1099 must be issued to any employee or non-incorporated client or customer for travel awards with fair market value over $600. Business meeting travel is nontaxable to employees, subject to the definition of what constitutes a business meeting, depending on which jurisdiction one is in.
Corporate travel incentives can be deducted by the company if th purpose of travel is for a business meetings within the United States and some parts of the Caribbean, excluding foreign-flag cruises.
The FTC forbids making purchase necessary when offering travel awards to customers in contests or sweepstakes. Many states strictly regulate how such awards are used, including full disclosure requirements. If you are deciding to run such a contest, it is advised you seek legal counsel.
