FOR IMMEDIATE RELEASE
Proposed Nebraska Ad Tax
Lincoln, NE, February 1, 2021—AAF Nebraska Leaders: Nebraska State Senator Tom Briese (R) has introduced legislation to lower the sales tax rate and expand the base to include all services, including advertising. The bill is similar to one the Senator introduced last year. That measure was the subject of a hearing, but never advanced out of committee.
The new bill has been referred to the Revenue Committee and has a hearing scheduled for Wednesday, February 3 at 9:30am Central Time.
According to legislative insiders in Nebraska, the bill still has widespread opposition and is once again not expected to be approved. We will continue to monitor the situation closely and let you know if the prospects for the bill changes.
Even given this positive outlook, it would be helpful for advertising professionals to contact their Senators and let them know that any tax on advertising is a bad tax.
A tax on advertising should be opposed because:
- Placing a tax on advertising services and/or placement increases the cost of advertising. Because most clients operate on a fixed advertising budget, they will compensate for the tax by decreasing their advertising purchases. This will have a direct -- and negative -- impact on the advertising industry, economy, consumers, and the state.
- Advertising is the primary source of revenue for print and online media and the sole source for broadcasters. A reduction in advertising would inevitably result in a loss of jobs and a decreased ability to provide quality content and programming.
- Advertising is the engine that fuels the economy. Less advertising means fewer sales. Fewer sales mean reduced revenue and fewer jobs. Fewer sales also result in less sales tax revenue for Nebraska.
- Consumers will suffer. Advertising is an important source of information. In fact, the U.S. Supreme Court in the landmark Virginia Pharmacy case noted that to many people, the information in advertising is more important than news about current issues.
- Prices may rise. Studies show that advertising fosters competition and helps lower the price of products and services. Less advertising means less competition.
- National advertising dollars will leave the state. Marketers will move dollars to jurisdictions that do not charge a penalty to advertise.
Thank you for your work on behalf of AAF and the advertising industry. Please let me know if you have any questions or comments.
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