from Radio World /
02.28.2014 01:55PM
NAB Fights Proposed Ad Tax Deduction Cuts
Proposal would make half of expenditures deductable
WASHINGTON—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.



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