Louisiana Governor Backs Away From Sales Tax Proposal

We have good news from the Pelican State!

In a short speech yesterday to the Louisiana Legislature on the opening day of their 2013 session, Governor Bobby Jindal announced he was backing away from the tax reform proposal he had offered last month.  That plan called for eliminating the income tax, increasing the sales tax rate from 4% to 5.88% and extending the sales tax to a number of business services, including advertising agency services.  The Governor’s press release, which is available here, stated that the purchase of advertising time and space (“buys”) would not be taxed.  Acknowledging that his plan had received considerable criticism, Governor Jindal nevertheless challenged the Legislature to come up with its own plan to eliminate the state income tax.  Here is an article from the New York Times describing some of the politics of yesterday’s announcement.     

We had alerted our members about the Governor’s proposal last month and were working with allied industry groups in the state to oppose this new tax on the marketing process.  This is a very positive development but we will continue to closely follow the Louisiana Legislature as they consider budget/tax issues this year.

We expect more positive news today from Ohio, another state where advertising taxes have been proposed.

In late March, the House Finance Committee in the Ohio Legislature concluded three days of hearings on Governor Kasich’s budget and sales tax plan.  Shortly thereafter, the Chairman of the Committee stated that the sales tax plan was likely to be eliminated or at least drastically alternated.  Here is the story from the Columbus Dispatch.

ANA has been working with our members and local industry groups in Ohio to oppose the Governor’s plan to tax advertising and other business services.  We helped form the Ohio Advertising Tax Coalition, which has an excellent website (www.noadtax.com) and has been holding grass roots meetings with all of the members of the Ohio House.  Jim Davidson, the head lobbyist for The Advertising Coalition (TAC), our DC group that opposes ad taxes at the federal level, testified before the Finance Committee in Columbus and explained why imposing a sales tax on advertising was bad tax policy.

The Ohio Legislature returns today from a two-week recess and we expect the leadership to announce a new budget plan that will not include the Governor’s sales tax plan.  We will let you know when that announcement is made.

If you have any questions or information about the tax proposals in the states, please contact Keith Scarborough (kscarborough@ana.net) or Dan Jaffe (djaffe@ana.net) in ANA’s Washington, DC office at (202) 296-1883.