New Ad Tax Proposal in Oklahoma Raises Concerns

April 27, 2016

Oklahoma Governor Mary Fallin recently proposed eliminating a number of sales tax exemptions, including the exemption for advertising, in order to resolve a potential state budget shortfall of nearly $1.3 billion for FY2017. The current sales tax rate is 4.5 percent and counties and cities can add an additional local sales tax so the average sales tax rate is 8.77 percent. It is not clear whether the Governor would impose the sales tax only on local advertising purchased in-state or whether she would seek to impose it on all advertising which appears in the state.

We have alerted our members concerning the proposed ad tax and have encouraged them to reach out to the Governor or members of the legislature directly to oppose this misguided tax proposal. A study carried out by the widely respected economic research firm IHS Economics & Country Risk found that advertising helps generate $57.5 billion or 14.3 percent of economic activity in Oklahoma. Clearly, placing a tax on the effort to sell would be counterproductive and an antibusiness signal. While no one in the legislature has expressed support for this proposal so far, we are working with the Oklahoma broadcasters and other media and industry groups to closely monitor this situation.

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