ANA Calls on Nevada Congressional Delegation to Oppose Ad Tax Proposals

Yesterday, ANA sent letters to the members of the Nevada Delegation to Congress marking the start of the annual International Consumer Electronics Show which begins today with over 150,000 attendees in Las Vegas. The letters urge opposition to draft tax reform proposals in Congress that would drastically cut the advertising deduction.

According to a recent study commissioned by The Advertising Coalition and the Association of National Advertisers, and conducted by the highly regarded economic research firm IHS Global Insight, Inc., advertising expenditures account for $39 billion of economic output in Nevada – that is 16.1% of the state’s $242.9 billion in total economic output. Additionally, advertising-driven sales of products and services help support 187,566 Nevada jobs, 16.5% of the 1.1 million jobs in the state.  

These impressive figures could be in serious jeopardy, however. Due to a significant proposed change to the U.S. Tax Code, the bottom lines of Nevada companies could be at risk, as could the jobs of 187,566 Nevada residents. Draft tax reform legislation in both the House and the Senate would drastically change the way advertising has always been treated under the Tax Code.

Nevada businesses will face a significant financial burden as a result of the proposals in Congress. Companies that spend $1 million or more on advertising in a year would be allowed to deduct only 50% of their advertising costs. The remaining 50% would have to be amortized over ten years in the House draft and five years in the Senate draft. This would impose at least $169 billion in additional taxes on the ad community over 10 years.

ANA called on members of the Nevada Delegation to actively oppose any tax on advertising whether through a delayed deduction of these costs or other means because of its potential to seriously impact Nevada’s businesses’ bottom lines and jeopardize the state’s economy, jobs and sales. While Las Vegas, NV is clearly a large center of advertising, the IHS Global Insight economic analysis has demonstrated that every congressional district and state in the U.S. is profoundly positively impacted by advertising. The ANA supports tax reform – however, any tax on advertising whether through a delayed deduction of these costs or other means has the potential to seriously impact businesses’ bottom lines and jeopardize the economy, jobs and sales in every part of America.