—The Congressional battle over ad tax deductibility continues with the changes included in the latest House proposal.
House Ways and Means Committee Chairman Michigan Republican Rep. Dave
Camp has released a draft proposal to allow businesses to deduct only
50 percent of their advertising costs in the tax year they are incurred and
amortize the other half over 10 years. The proposal mirrors that
proposed in the Senate last fall by Senate Finance Committee Chairman
Montana Democrat Sen. Max Baucus.
Camp says his tax reform proposal will fix the “broken” tax code by
simplifying it as well as making it making it flatter and fairer “for
families and job creators.”
Advertising lobbyists, NAB and the National Alliance of State
Broadcasters Associations have warned changing or removing advertising
deductions can have devastating consequences on U.S. businesses. NASBA
previously told lawmakers advertising is the primary source of revenue
for most broadcasters: “Local radio stations currently receive 96 percent of
their revenues from advertising and televisions receive 94 percent.”
NAB, meanwhile, “strongly opposes any job-killing proposal that would
limit the ability of thousands of large and small businesses from fully
deducting their annual advertising expenses,” according to Executive Vice President of Communications Dennis Wharton.
Advertising on local radio and television stations is a key driver of the American economy, he says, pointing to a study from Wood & Poole Economics that finds local radio and television advertising generates $1.05 trillion in GDP and supports 1.48 million jobs.
NAB will work with lawmakers and other stakeholders to ensure the
advertising tax deduction “continues to create economic prosperity and
well-paying jobs,” Wharton said.