TAB’s new sales tax guide highlights equity, savings for stations

posted on 11.30.2015

Fighting for equitable state tax policy for broadcasters is one of TAB’s primary legislative priorities and over the past 25 years that focus has generated huge savings for radio and TV stations alike.

Beyond repeatedly defeating efforts to impose an Ad Tax, which would siphon 8.25 percent of advertising revenue, stations benefit from TAB’s work on sales tax exemptions on key business inputs at multiple stages in the production process.

TAB’s new legal guide on state sales tax policy for broadcasters explains the ins and outs of these exemptions to help stations ensure they’re fully benefiting from TAB’s efforts. The guide was prepared by TAB’s longtime tax counsel, Cindy Ohlenforst with the K&L Gates law firm. It addresses TAB’s latest victory – lifting the sales tax on radio stations’ digital transmission equipment in the 2015 legislative session – and offers important guidance on managing projects that include taxable and non-taxable items.

The sales tax is generally appreciated by policymakers because of its transparency, i.e., consumers know how much tax they’re paying on any given item. But it’s easy to lose sight of the value of a tax exemption over time, as well as the fact that a given tax exemption is not guaranteed in perpetuity.

The value of an exemption to a given station is clear:  add 8.25 percent to each tax-exempt item purchased.  With TAB membership dues ranging from $100 to $6,500 annually, a station’s ROI on dues is readily calculable on this front alone.  And for each tax policy win TAB scores, we must continually work to protect it against misinterpretation or repeal.

Station owners, managers, accountants and engineers should take the time to review this guide carefully and contact TAB whenever uncertain about the taxability of a particular item.

Download TAB Sales Tax Guide

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

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