May 13, 2017

Representatives Kevin Yoder (R-KS) and Eliot Engel (D-NY) have sent a “Dear Colleague” letter to Speaker of the House Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA) in support of protecting the current tax deductibility of advertising. This letter is extremely significant for the advertising community and shows wide congressional support for our industry. There were 124 bipartisan members of Congress who signed the letter.

ANA’s D.C. office played an important role in building support for the Dear Colleague letter. We particularly reached out to members of the House Energy & Commerce Committee as those members regularly vote on issues of importance to the advertising community. Since they are familiar with our issues, they also understand how important advertising is to the economy at the federal, state, and local levels. ANA also spearheaded an effort to contact all Members who had signed on to the previous version of the Yoder-Engel letter that was circulated in 2015. For the 2015 letter, 88 Members of Congress signed on. Significantly, we surpassed that number by 36 signatories this year.

While it is not clear when Congress will fully consider tax reform this year, it is critical that our industry work proactively to preserve the current tax treatment for advertising spending. The broad bipartisan support behind the Dear Colleague letter illustrates the growing opposition in Congress to amortizing advertising. Advertising’s immediate deductibility has been an important part of the tax code for over 100 years, and changing this key tax status would create serious harm for the economy. It has been proposed, for example, that 50% of each year’s advertising expenditures would have to be expensed over 10 years. This proposal would impose at least $169 billion in additional taxes on the ad community, seriously burdening the selling effort throughout the U.S., and would place millions of jobs at risk.

A study carried out by the noted economic forecasting research organization IHS Economics and Country Risk demonstrated that in 2014, advertising supported 20 million jobs and drove $5.8 trillion in economic activity. These impressive numbers can only continue to be achieved in the future by supporting the current tax treatment of advertising. ANA thanks Congressmen Engel and Yoder for initiating this effort and their colleagues for the support they have shown for the advertising industry. We urge the whole Congress to consider the importance of advertising as an engine of the economy when undertaking tax reform.

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