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Ad Tax Fights Possible in Michigan and Iowa

The marketing community may be facing ad tax battles in the legislatures in Michigan and Iowa.  We need your assistance to respond to these threats.

Michigan:  Earlier this month, Governor Jennifer Granholm proposed a new 2% tax on many business services.  Under her proposal, advertising agency fees would be subject to the 2% tax but the purchase of advertising time and space would not be covered.  The state of Michigan faces a serious budget problem with a projected deficit of $1 billion for the current year and the new fiscal year which begins October 1st.

No specific bill reflecting the Governor's tax proposal has been introduced yet.  Various forms of advertising taxes have been proposed in recent years in the Michigan Legislature.  ANA is working closely with a coalition of industry groups, including the Michigan Association of Broadcasters, to oppose any tax on advertising.

If your company has significant contacts with Governor Granholm or the leadership in the Michigan Legislature, it would be very helpful if you would contact them to express your opposition to any tax on advertising services. 

Iowa:  In the Iowa House, Representative Pam Jochum has introduced a political campaign finance reform bill (House Study Bill 105) that would impose a one-percent tax on all political advertising. 

HSB105 has been referred to a subcommittee of the House State Government Committee.  During consideration of the bill in subcommittee last week, a representative of the Revenue Department argued that singling out political speech for taxation would be discriminatory.  Thus, there was some discussion about extending the tax to all commercial advertising, possibly at a rate of 5%.  The subcommittee is scheduled to consider HSB105 again on February 26th.

It is very important that marketers contact the members of the subcommittee to express your opposition to any tax on advertising.

The members of the subcommittee are:

Representative Pam Jochum (pam.jochum@legis.state.ia.us)

Representative Beth Wessel-Kroeschell (beth.wessel.kroeschell@legis.state.ia.us)

Representative Vicki Lensing (vicki.lensing@legis.state.ia.us)

Representative Carmine Boal (carmine.boal@legis.state.ia.us)

Representative Jeff Kaufmann (jeff.kaufmann@legis.state.ia.us)

We have prepared some talking points you may wish to use against any tax on advertising.

If you have any questions or more information about the ad tax proposals in Michigan or Iowa or any other state, please contact Keith Scarborough, Senior Vice President in ANA's Washington, DC office at kscarborough@ana.net or (202) 296-1883.

If someone else in your company is responsible for state tax issues, please pass this along and provide us their contact information for future communications.

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