Tax Deductibility of Advertising

Advertising has long been the foundational core of our nation's free local broadcast system.  And stations still rely primarily on advertising as their primary source of revenue.  Currently, businesses can deduct the full costs advertising as an ordinary and necessary business expense.  Any changes to this tax treatment of advertising may force a drop in advertising revenues that would necessarily threaten the viability of Virginia's local radio and television stations to invest in the very local programming - including local news, public affairs and emergency information - that is so important to local communities. 

Advertising also is a proven job-creator throughout Virginia's economy.  It triggers both direct and indirect economic impacts through increased demands for products and services generated by advertising which, in turn, triggers increases in consumer spending.   You can see specific stats related to Virginia below under "Ad Stats in Virginia."

President Trump and GOP Congressional leaders have released a framework for comprehensive tax reform.  It contains ambitious proposals to create a lower, simplified corporate tax structure - including a 20% across-the-board tax rate and full capitalization of depreciable expenses in the year they are incurred.  It is important, however, that Congress not change the full deductibility of advertising as part of this process.  Rather, the deduction must remain as a pillar of local economic activity and the continued viability of local broadcast service. 

Your station and your local advertisers are critical voices in this debate. 

WHAT YOU CAN DO:

The key tax-writing committees are the House Ways and Means Committee and the Senate Finance Committee.  Senator Mark Warner(D-VA) serves on the Senate Finance Committee, the key tax-writing Contact his office and make your voice heard on this issue. 

Contact the other Members of Congress in Virginia to educate and advocate for keeping the ad deduction.

You can find contact information for each office here [insert link to your directory].

HOW WE CAN HELP:

Below are links to resources that will assist you in your communications with Members of Congress:

  • VAB Issue Paper on Ad Deductibility
  • Statistics of Economic Activity in Virginia (see below)
  • U.S. House Letter - signed by 123 Members of Congress to Speaker Ryan and Minority Leader Pelosi advocating against any changes to the deductibility of advertising
  • Letter from Coalition of Conservative Think Tanks
  • Letter from Rural and Minority Stakeholder Groups
  • Letter from 50 State Broadcasters' Association
  • 2015 IHS Advertising Study
  • U.S. Senate draft letter
  • BAADTax (Businesses Against Advertising Tax)

 

AD STATS IN VIRGINIA:

 

District

Economic Activity in District

 

Jobs in District

$1 million spend on advertising =

Statewide

$144 billion (15.3%)

548,865 (14.3%)

76 jobs

1st

$4.8 billion (12%)

20,397 (12%)

93 jobs

2nd

$9.3 billion (17%)

36,297 (16%)

83 jobs

3rd

$15.3 billion (14%)

57,514 (14%)

78 jobs

4th

$9.9 billion (14%)

37,271 (13%)

68 jobs

5th

$7.5 billion (15%)

31,074 (12%)

79 jobs

6th

$12.2 billion (16%)

46,301 (14%)

67 jobs

7th

$19.4 billion (16%)

70,472 (15%)

68 jobs

8th

$12.4 billion (14%)

51,701 (15%)

96 jobs

9th

$12.1 billion (15%)

41,834 (12%)

64 jobs

10th

$16.1 billion (16%)

62,119 (16%)

76 jobs

11th

$25.1 billion (17%)

93, 886 (16%)

79 jobs

 

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