ANA URGES D.C. COUNCIL TO REJECT PROPOSED ADVERTISING TAX

FOR IMMEDIATE RELEASE
July 7, 2020

ANA URGES D.C. COUNCIL TO REJECT PROPOSED ADVERTISING TAX

WASHINGTON, D.C. (July 7, 2020) - The Association of National Advertisers today urged the Council of the District of Columbia to reject a proposed three percent tax on the planning, creation, placement, and display of advertising in print, broadcast, and digital media.

“The Council is considering an extremely misguided tax that has failed everywhere it has been tried,” said Dan Jaffe, ANA Group Executive Vice President. “Advertising taxes suppress consumer demand, slow job growth, and ultimately cause products and services to become more expensive for consumers. A tax on advertising is always counterproductive but would be even more damaging during the COVID pandemic and the accompanying severe economic downturn. Clearly, this tax could be backbreaking for small businesses and community publications.”

The Council today held an initial affirmative vote on the proposal by Chairman Phil Mendelson (D) as part of a FY 2021 budget review.

Since 1987, more than 100 advertising taxes similar to the one proposed by the Council have been considered and rejected in 40 states. This includes Maryland, where the state legislature this year passed a tax on digital advertising. That tax was ultimately vetoed by the governor as “unconscionable” due to the COVID-19 pandemic and economic crisis.

The proposed tax voted on today is even more comprehensive than the Maryland tax, as it would cover all advertising in the District of Columbia. Jaffe noted: “This ad tax proposal was first proposed yesterday for consideration at the Council today, giving no opportunity for groups impacted by the proposal to consider its extremely broad implications or to be heard in an open hearing.”

Jaffe also said the advertising industry is extremely valuable to the economy of the District of Columbia and the entire U.S. as a driver of sales and employment.

“The Chairman claims that the proposed tax will raise $18 million in revenue,” Jaffe said. “But this ignores the fact that the advertising industry generates vastly greater amounts of economic activity and tens of thousands of jobs in D.C. This tax undermines the economic benefits imparted by the advertising industry.”

Jaffe emphasized that passage of the proposed tax would be counterproductive to the goal of raising revenue.

“Advertising drives sales and sales taxes, and it would thus suppress the District’s tax collection by greatly throttling the District’s economic growth,” he said. “Now is not the time to consider increasing taxes on businesses or consumers.”

The D.C. Council needs to take further votes before this bill will be finalized and enacted.

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ABOUT THE ANA: The ANA (Association of National Advertisers)’s mission is to drive growth for marketing professionals, for brands and businesses, and for the industry. Growth is foundational for all participants in the ecosystem. The ANA seeks to align those interests by leveraging the 12-point ANA Growth Agenda, which has been endorsed and embraced by the ANA Board of Directors and the Global CMO Growth Council. The ANA’s membership consists of nearly 1,600 domestic and international companies, including almost 1,000 client-side marketers and nonprofit fundraisers and 600 marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). Collectively, ANA member companies represent 20,000 brands, engage 50,000 industry professionals, and invest more than $400 billion in marketing and advertising annually.

MEDIA CONTACT:
Dan Jaffe
Group EVP, Government Relations, ANA
Phone: 646.369.4886
Email: djaffe@ana.net