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ALERT: Comprehensive Advertising Tax Reform Plan Released in Congress

By Posted in - General News & Government Relations on March 2nd, 2014 0 Comments

Over the last few months we have kept abreast of developments in legislative tax reform proposals that would affect the advertising tax deduction and our industry. Representative Dave Camp, chair of the House Ways and Means Committee, has announced his comprehensive tax reform overhaul proposals and we need to speak out on it. If you have a minute or two this week, please join me in calling the offices of Congressman Mike Thompson (CA-05), member of the committee, to speak out against the proposed 50% reduction in the current ad tax deduction and the impact it would have on our industry across the board.

Here is an urgent government relations update from the desk of Clark Rector, Executive VP for Government Affairs of the American Advertising Federation:


House Ways and Means Committee Chairman Dave Camp, R-Mich., has finally released his public discussion draft for tax reform and the advertising industry is targeted for new revenues.

Under advertising provisions of the proposal “a taxpayer must capitalize and amortize 50 percent of its specified advertising expenses over a 10-year period, beginning with the midpoint of the tax year in which the expenses are paid or incurred.  The remaining 50 percent of a taxpayer’s specified advertising expenses may continue to be deducted in the year paid or incurred (as under present law).”  The proposal provides an exemption from the capitalization requirements for taxpayers with advertising expenses of less than $1 million in a taxable year.

This proposal, if enacted, would have a devastating impact on the advertising and media businesses as well as the economy as a whole.  AAF will continue to educate lawmakers as to the value of keeping advertising as a fully deductible business expense in the current year, and urge them to oppose any changes to that status.  We urge all AAF members to contact their Representatives and tell them to oppose this provision of the tax reform plan.

Tax reform, and threats to advertising deductibility, will be a major topic of discussion at AAF’s Advocacy and Action: Advertising Day on the Hill on March 11 and 12.  One of the featured speakers will be Rep. Mike Kelly, R-Penn., who sits on the Ways and Means Committee and will talk about the prospects for the tax reform package.

If you have not yet done so, I urge you to register today for Advocacy and Action: Advertising Day on the Hill.  A hotel room block is available one block from the conference venue.

This is your opportunity to learn about tax reform and other issues confronting the advertising industry – and then tell your elected representatives where you stand.