State Budget Pressures Could Lead to Ad Tax Fights

Many state governments are facing severe budget pressures that are expected to intensify for the foreseeable future. Unlike Congress, state governments must pass balanced budgets each year, so they must cut spending, raise taxes or do some combination of both. In this environment, we expect states to consider new taxes on business services, such as advertising, to raise needed revenues.

Over the last twenty years, ANA has helped defeat over 120 ad tax proposals in more than 40 states. We work with our member companies and our sister associations (the American Association of Advertising Agencies and the American Advertising Federation) to respond to these threats. We also work closely with the broadcasters, newspaper publishers, magazine publishers and outdoor advertising groups in the states to explain why taxing advertising is a bad idea.

We are also members of The Advertising Coalition, which has developed the Global Insight Study, directed by Nobel Laureate in Economics Lawrence Klein. That study quantifies the economic impact of advertising in every state and congressional district in the country. This is a powerful tool for demonstrating why a tax on advertising is bad for the economy and businesses in the states. 

As the states begin their legislative sessions this month, we will keep you informed of further developments in this area.