Alert: March 14, 2013

AAF Louisiana Members:

As you have probably heard, this morning Governor Bobby Jindal (R) released his proposal to eliminate the state income tax. In order to keep the plan revenue neutral, he proposes raising the sales tax rate to 5.88% (from 4%) and expanding the base to include many services not presently taxed.

The good news is that the plan specifically excludes advertising “buys.” Unfortunately, officials at the Department of Revenue had previously told industry representatives that creative and other advertising agency services were still on the table. Until we see legislative language that specifically excludes these services, we must assume they will be subject to the tax.

The House Ways and Means Committee will be looking at the plan next week. It is very important that advertising industry contact members of the Ways and Means Committee and tell them agency services should not be taxed. Agency services are very portable and clients can easily take their business elsewhere. The proposal is a jobs bill for Texas, Arkansas and Mississippi advertising agencies. Other talking points are listed below.

You can find contact information for the Committee and other legislators on the Louisiana Legislature homepage. I urge you to contact lawmakers and express strong opposition to taxing any advertising services.

Please do not hesitate to contact me if you have any questions or comments.

Clark Rector
Executive Vice President-Government Affairs
American Advertising Federation
Follow me on Twitter @ClarkRector1
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