Ad costs tax deductibility at risk

posted on 5.18.2015

Broadcasters are urged to ask their members of Congress to sign onto a bipartisan “Dear Colleague” letter opposing changes to the tax deductibility of advertising as ongoing efforts in Congress to revamp the federal tax code continue to worry economists and advertising-dependent businesses that an eventual tax reform proposal could reduce the deduction or eliminate it altogether.

The tax deduction, which covers 100 percent of advertising costs, has been in place since the tax code was first adopted.

Reps. Kevin Yoder, R-Kansas, and Eliot Engel, D-New York, are circulating the letter which notes that every dollar of advertising purchased in the U.S. generates $22 of economic activity, according to an IHS Global Insight study. In Texas, advertising stimulates $91.28 billion in GDP and more than 120,000 jobs.

“Changing the tax code to impose a tax on advertising will have significant negative consequences for the U.S. economy,” the letter says.  “Tax reform is an important goal, but the changes Congress makes should be smart ones.”

The deadline for joining the letter is May 29^th.  To date, Reps. Gene Green, D-Houston, Blake Farenthold, R-Corpus Christi, and Lamar Smith, R-San Antonio, have signed onto the letter.

A copy of the letter, list of Congressional contact information, sample email request and related research are available for members only here.

Questions?  Contact TAB's Oscar Rodriguez or call (512) 322-9944.

---