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Houston broadcasters lead local effort to avert Ad Tax

 - Endangers key economic driver for Texas                  

Repealing the century-old federal business tax deduction for advertising expenses threatens more than half a trillion dollars in economic activity in Texas and should remain off the table in Congressional deliberations. That was the key message that a dozen local Houston Radio and Television broadcasters delivered to the Houston congressman leading the effort to revamp the federal tax code.

Reiterating Texas broadcasters’ position just ahead of a key point at the start of the tax reform process, they noted that advertising also helps support 1.7 million Texas jobs, or 14.6 percent of the 11.9 million jobs in the Lone Star State.

Rep. Kevin Brady, R-Conroe, chairs the tax-writing House Ways and Means Committee, and while he has expressed personal opposition to repealing the deduction – which would constitute an Ad Tax – he is under enormous pressure to find ways to offset tax cuts to keep them from worsening the federal budget deficit.

He and House Speaker Paul Ryan, R-WI, had advanced a Border Adjustment Tax this summer as a way to align U.S. tax policy with that of every other major economy in the world and generate substantial revenue to offset tax cuts, but strenuous objections from international businesses forced them to change course and look for other ways to do so.

Advertisers and the businesses that rely on them are concerned an Ad Tax could be in the potential mix of ideas because a previous Ways and Means Committee chairman in 2014 proposed slashing the deduction by half in the first year advertising expenses were incurred, with the balance being amortized over a decade.

The advertising costs deduction has been part of the Tax Code and approved by the Internal Revenue Service for more than 100 years.

I continue to urge all Texas station owners and GMs to ACT NOW and urge their local members of Congress to oppose any change to the advertising deduction.  The link makes it easy for broadcasters and advertisers alike to weigh in quickly and directly.

Houston broadcasters’ letter to Brady was also signed by the publisher of the Houston Chronicle and two ad agency executives.

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

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