September 27, 2013


Advertising Deductibility Threatened

According to sources from within the House Ways and Means Committee, limitations on the full tax deductible status of advertising continue to be actively considered as a part of potential tax reform legislation.  Chairman Dave Camp, R-Mich., and other committee members are attempting to write legislation that would lower the top individual and corporate rate to as low as 28 or 25 percent.  In order to do that and keep the measure revenue neutral (maintaining the same amount of tax revenue) many tax deductions and preferences must be eliminated or reduced.

Details on the form of the limitation are few.  Possibilities include disallowing a portion of the deduction, amortizing a certain percentage or creating different tax treatments for brand vs. product advertising.  AAF has alertedour nationwide network of grassroots members and urged them to contact members of the Ways and Means Committee to express opposition and explain the negative economic consequences of any tax on advertising.

Given the current polarization in Congress, prospects for enactment of comprehensive tax reform legislation appear to be remote.  However, it is still important to keep an ad tax out of the proposal even if it does not pass, since the legislation could well become the starting point in future years.

FTC Plans Workshop on Sponsored Content

The Federal Trade Commissionhas announced it will conduct a December 4 workshop on sponsored content or “native advertising.”  The Commission will examine “the practice of blending advertisement with news, entertainment, and other content in digital media.”  They want to insure that consumers recognize and understand the messages and can identify advertisements as advertising whenever they appear.  The workshop follows recent updates to the Commission’s Search Engine Advertising Guidance, the Dot Com Disclosure Guidanceand the Endorsements and Testimonials Guides.

Firm Asks FEC Not to Require Disclosures in Mobile Ads

Revolution Messaging, a digital media firm, has asked the Federal Election Commissionto exempt mobile ads from requiring the standard disclosure statements that are required in political advertising.  The firm argues that mobile devices are too small and that the disclosures would overwhelm the actual advertisement.  The FEC has not yet responded to the request.

Court Hears Arguments on Net Neutrality

The U.S. Court of Appeals for the DC Circuithas heard oral arguments in Verizon v. Federal Communications Commission.  In the case, Verizon is challenging the Commission’s net neutrality rules which prohibit cable and telecom services from blocking websites.  They also discourage the creation of so-called “fast lanes” for sites willing to pay more for faster delivery of content into homes, such as a web site paying an Internet service provider extra to insure fast delivery of content such as streaming videos. 

Most observers believe that the three judge panel seemed inclined to strike down the rules, believing the FCC lacks the authority to regulate the Internet in such a manner.  No timetable has yet been give for a release of the Court’s decision.

Advertising Day on the Hill Set for March 12

AAF’s Advocacy and Action: Advertising Day on the Hill has been scheduled for Wednesday, March 12 2014.  At the 2013 conference 50 attendees from over half the states heard such speakers as Federal Trade Commission Chairwoman Edith Ramirez and Rep. Pat Tiberi, R-Ohio, chairman of the House Ways and Means Revenue Subcommittee.  Mark your calendars now and plan to join us for this exciting event.

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The AAF protects and promotes advertising at all levels of government through grassroots activities. Our nation-wide network monitors advertising-related legislation on local, state and federal levels. We put our members face-to-face with influential lawmakers while encouraging self-regulation as a preemptor to government intervention, when appropriate of course. To learn more about our advocacy efforts, click here.