Alert: March 4, 2013


Ohio Ad Club Presidents and Officers,

Hearings have begun in the Ohio legislature on Governor Kasich’s proposed budget plan, which includes extending the sales tax to many services including advertising.

The House Ways and Means Subcommittee will be hearing testimony this week.  Ways and Means will not vote on the bill, but will give recommendations to the Finance Committee which will approve, reject or modify the legislations.

The schedule for the Ways and Means Committee is:

Tuesday, March 5, 10:00 am, Statehouse room 113 from proponents and interested parties
Wednesday, March 6, 3:00 pm, Statehouse room 116, from opponents and interested parties
Thursday, March 7, 9:00 am, Statehouse room 116, all parties

Another subcommittee hearing may be scheduled next week and the Finance Committee is expected to conduct hearings later in the month.

It is very important that legislators hear from the advertising industry about our opposition to any tax on advertising.  If you wish to testify at the Ways and Means hearing it is recommended that you contact Chairman Peter Beck’s office, but it is not necessary.  You can simply go to the hearing and sign up there.

Even if you cannot get to Columbus to testify, please contact your state Representative and let him or her know of your opposition to any tax on advertising.  You can find contact information for lawmakers through a search tool on the Ohio Legislature homepage.  Talking points against the tax are listed below.  Please feel free to personalize them to your business.

I urge you to disseminate this alert to you members.  Please let me know if you or any of your club members are able to testify or get any response from your Representatives.  Do not hesitate to contact me at crector@aaf.org or 202-898-0089 if you have any comments or questions.

Thank you.

Arguments Against a State Ad Tax

Placing a tax on advertising services and/or placement increases the cost of advertising.  Because most clients operate on a fixed advertising budget, they will compensate for the tax by decreasing their advertising purchases.  This will have a direct -- and negative -- impact on the advertising industry, economy, consumers and the state.

Advertising is the primary source of revenue for the print media and the sole source for broadcasters.  A reduction in advertising would inevitably result in a loss of jobs and a decreased ability to provide quality content and programming.

Advertising is the engine that fuels the economy.  Less advertising means fewer sales.  Fewer sales mean reduced revenue and fewer jobs.  Fewer sales also result in less sales tax revenue for the state.

Consumers will suffer.  Advertising is an important source of information. In fact, the U.S. Supreme Court in the landmark Virginia Pharmacy case noted that for many people, the information in advertising is more important than news about current issues.

Prices may rise.  Studies show that advertising fosters competition and helps lower the price of products and services.  Less advertising means less competition.

National advertising dollars will leave the state.  Marketers will move to markets where they can reach the most consumers with the fewest dollars.

Border markets will suffer.  Media in markets close to the state line will lose money to untaxed media across the border.

 

Clark Rector
Executive Vice President-Government Affairs
American Advertising Federation
crector@aaf.org
Follow me on Twitter @ClarkRector1
202-898-0089
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