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Bill to Reduce Advertising Tax Deductions Threatens Local and National Economies

11 Dec 2013 11:54 PM | Anonymous
Contact: 
Jeff Hancock
2013-2014 Secretary
AAF Lexington 
859 494 4708
jeff.hancock@aaflexington.com 

LEXINGTON, KY. ( December 09, 2013) – The American Advertising Federation (AAF) has issued a Government Alert concerning a recently released bill in the Senate that would greatly affect the advertising industry on a national scale. The plan under consideration would require 50% of all advertising costs to be amortized over 5 years and 50% deducted in the first year of the amortization schedule. A new schedule would be required each year a company purchases advertising.

For the past 100 years, the Tax Code has rightly permitted businesses to deduct the full cost of their advertising, which is a necessary expense businesses must pay to communicate with customers and generate sales. This proposal is a major economic threat to not only the advertising industry, which provides 20 million jobs, or 15% of jobs, in the country, but those businesses who advertise, whose expenses generate $5.8 trillion of activity in the U.S. economy.

“The stimulus generated by advertising brings jobs and sales to every state and to every congressional district,” says Clark Rector, Executive Vice President – Government Affairs for AAF. “Any reduction that limits the amount a business may deduct of its total advertising spending could have a devastating impact on jobs and economic activity.”

Should this legislation pass, the nation’s struggling economy would take another devastating blow. IHS Global Insights estimates that this bill could reduce sales by $446 billion and place 1.7 million U.S. jobs at risk. In Kentucky, this legislation would obstruct the $67.3 billion of economic output accounted for by advertising and threaten over 275,000 jobs, or nearly 15% of all jobs in the state, supported by the local advertising industry.

In order to prevent this economically disastrous bill from passing into law, AAF is calling on the advertising industry and those affected by it to contact their senators and ask them to oppose any change to the tax treatment of advertising. Senators can be easily contacted through the U.S. Senate website, www.senate.gov. Look for “Find Your Senators” in the upper right hand corner of the page. 

AAF Lexington has rallied its membership behind this cause by distributing Government Alerts, posting on its social media sites about the issue, and circulating a letter urging members and non-members alike to sign and join in the fight against this legislation.

“We are the unifying voice of the advertising industry so we have to stand up collectively in Kentucky to fight this legislation. Otherwise, it could negatively affect everyone. Even general commerce in our area. Basically if you advertise, rely on advertising for your business or provide services such as advertising consulting, photography, design, web programming, printing, etc., you are affected. Even the popular tech startup scene is not safe since many startups rely on advertising for revenue. Let’s stand up against this together, Kentucky.” – Adam Martin, 2012-2014 AAF Lexington President

Join AAF and AAF Lexington in opposition of this bill by contacting your senator  today. For more information about this proposed change to advertising tax deductions, follow @AAFLex on Twitter, like the AAF Lexington’s Facebook page.
 
The American Advertising Federation Lexington, formerly the Advertising Federation of Lexington (Lexington AdClub), represents Lexington’s multimillion dollar advertising industry and is a Division I member of the American Advertising Federation. Originally incorporated on  October 5, 1950 today’s AAF Lexington is the area’s oldest membership organization for marketing, advertising, and other communications professionals. To learn more, visit aaflexington.com. 

Copyright © 2013 AAF Lexington. All rights reserved.
Contact email: communications@aaflexington.com
AAF Lexington
P.O. Box 1815
Lexington, KY 40588-1815

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