Two Coalitions Ask Congress Not To Eliminate Tax Deductability For Advertising

Deduction Debate

The idea of eliminating the tax deductibility of advertising has once again surfaced in WASHINGTON, and two coalitions have written to Congress to voice their opposition to the proposal.

In a letter to Reps. KEVIN BRADY (R-TX), Chairman of the House Ways and Means Committee, and Sen. ORRIN HATCH (R-UT), Chairman of the Senate Finance Committee, the leaders of the AMERICANS FOR TAX REFORM, NATIONAL TAXPAYERS UNION, AMERICAN CONSUMER INSTITUTE, COUNCIL FOR CITIZENS AGAINST GOVERNMENT WASTE, DIGITAL LIBERTY, FRONTIERS OF FREEDOM , HISPANIC LEADERSHIP FUND, INSTITUTE FOR POLICY INNOVATION, THE LATINO COALITION, SMALL BUSINESS & ENTREPRENEURSHIP COUNCIL, TAXPAYERS PROTECTION ALLIANCE, and TECH FREEDOM wrote that they oppose eliminating the deduction as "the wrong approach to tax policy" that "would undermine the gains from (proposed immediate) full business expensing. Congress should make the tax code as simple and fair as possible.  That means treating all expenses equally, whether that means wages and other forms of  compensation, travel, rent, advertising, etc. None of this is particularly exotic."  

The letter warns against Congress "pick(ing) winners and losers by singling out certain industries" and says that such a move against advertising "would negatively impact an industry that contributes $5.8  trillion in total economic output and is tied to 20 million jobs directly or indirectly" and "would be detrimental to local and national advertisers, broadcasters, print and online media, and other firms that rely on advertising as their primary source of income."

A separate letter to BRADY, HATCH, and House Ways and Means Committee Ranking Member RICHARD NEAL (D-MA) and Senate Finance Committee Ranking Member RON WYDEN (D-OR) from the NATIONAL GAY & LESBIAN CHAMBER OF COMMERCE, US BLACK CHAMBERS, INC., US HISPANIC CHAMBER OF COMMERCE, and US PAN ASIAN AMERICAN CHAMBER OF COMMERCE strikes a similar tone, saying that "Any changes limiting the full deductibility of advertising will have a significant negative effect on our small business owners, and additionally harm consumers."  

The letter adds, "Maintaining the existing, full, first-year deduction for advertising costs is essential to small business success, their ability to reach consumers representing their communities, and consumers at large.  Moreover, any change in the deduction directly impacts Minority and LGBT-owned newspapers, magazines, radio and television. These media often serve specific local interests and concerns, and are highly dependent on advertising revenue to survive and grow. Minority and LGBT-owned media is already underrepresented and at risk – a change in our ability to attract new consumers with community-specific targeting and promotion could have an irreversible effect on owners’ ability to provide needed information to consumers of the goods and services available."

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