Final Tax Bill Passes Without Restricting Advertising

The Association of National Advertisers released the following statement on the passage of the Tax Cuts and Jobs Act:  

“We are very pleased that the tax reform package passed by Congress did not restrict the critical advertising deductions that businesses use to market their goods and services,” said Dan Jaffe, Group Executive Vice President of Government Relations for the ANA. “Doing so would have imperiled an industry that drives almost 20 percent of U.S. GDP and supports nearly 20 million jobs annually in the U.S. We commend Congress for its leadership in recognizing the key role advertising plays in our economy. ANA has long advocated for common-sense tax reform that lowers corporate rates and guarantees U.S. competitiveness on a global playing field.”

For over a century, advertising has been a regular, deductible business expense under the U.S. tax code. Businesses of every size and scope rely on advertising as a critical ingredient for driving sales, and the American economy relies on it for growth.  

According to a major 2015 study by IHS Economics and Country Risk:

  • Advertising contributed $3.4 trillion to the U.S. GDP in 2014, comprising 19 percent of the nation's total economic output.
  • Each dollar spent on advertising expenses generates nearly $19 of economic output that would not have otherwise existed.
  • In 2014, advertising accounted for $5.8 trillion in overall consumer sales, totaling 16 percent of all sales activity in the U.S.
  • Advertising generates nearly 20 million jobs annually.
  • Every direct advertising job supports another 34 jobs across all industries.

Jaffe concluded, “The deductibility of advertising costs has been under serious attack for several years in the Congress. Preserving our tax treatment in the context of tax reform is a major victory for the entire marketing community.”