Update on State Ad Tax Proposals

The bill in the South Dakota House of Representatives that would impose a 4% gross receipts tax on all advertising services in all media (House Bill 1266) was defeated yesterday by a 9-5 vote in the Taxation Committee.  ANA had written to all of the members of that committee expressing our opposition to the proposal.

Two product-specific ad tax bills have been introduced in the New York State Assembly.  Assemblyman Richard Brodsky has introduced AB5030, which would eliminate the corporate income tax deduction under state law for the costs of any DTC prescription drug advertising.  Assemblyman Felix Ortiz has introduced AB2455, which would impose a tax on certain food and drink products, movies and video games.  The Ortiz bill would also prevent companies from deducting from income the New York share of expenditures for advertising food, video games and equipment, movies, videos or DVDs on TV shows watched primarily by children under age 18.

Both bills have been referred to the Assembly Ways and Means Committee.  We will contact the members of the committee to express our strong opposition to these bills.  More information about the bills is available at http://assembly.state.ny.us/

ANA is working with member companies and other industry groups to oppose these two bills.  They represent bad public policy and raise serious First Amendment concerns by singling out certain ads for differential tax treatment based on their content.  We will keep you informed of further developments on these bills.

If you have any questions or more information about these bills or other state ad tax proposals, please contact Keith Scarborough, Senior Vice President for Government Relations in ANA's Washington, DC office at kscarborough@ana.net or 202-296-1883.