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.  According to the nonpartisan Center on Budget and Policy Priorities, states are collectively facing shortfalls of over $121 billion in FY2011.  This article in last Sunday’s New York Times describes some of the serious problems facing several state governments.

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.

We need your help to respond to these threats.

We ask that you do the following to help us rapidly respond to any state ad tax threats:

  • If you hear about a potential ad tax threat in any state legislature, please contact Keith Scarborough, Senior Vice President for Government Relations in ANA’s Washington, DC office at or 202-296-1883.
  • If there are others in your company who are responsible for state tax issues, please pass this along and provide their contact information for future communications to Andrew Howell at or 202-296-1883.

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.  More details about this important study are available at

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

We look forward to working with you during this challenging period.