Legislative Alert: July 21, 2020

Subject: DC Ad Tax - Urgent AAF Call to Action

AAF-DC and Ad 2 DC leaders:
 
The proposed ad tax was the subject of much lively and chaotic discussion by the DC City Council earlier today.  It is very apparent that there is substantial opposition to the tax by many Councilmembers.  Their dilemma is in finding $18 million in offsetting revenue or budget cuts that would allow them to eliminate the ad tax.
 
In a somewhat controversial move, the Council approved a motion by Chair Mendelson to delay consideration of the tax for a day or two and ask the city’s budget office staff for a list of small across the board cuts that would total $18 million.
 
There is still no guarantee that the cuts will be approved and it is possible that a Councilmember may try to have the motion reversed before the Council adjourns later this evening.  We know that many advocates are urging the Council to pass the budget as is, including the ad tax.
 
It is urgent that Councilmembers continue to hear from the advertising and business community about the important of eliminating the ad tax. Please contact them today through email and Twitter. Their addresses and Twitter handles are both available on their City Council Bio pages.
 
Thank you for your continued work on behalf of advertising.
 
Clark
 
The 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 District.
• 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 the District.
• 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 District media. Marketers will move dollars to Maryland and Virginia media outlets that reach DC customers.

Clark Rector
Executive Vice President-Government Affairs
American Advertising Federation
1101 K Street, NW, Suite 420
Washington, DC  20005
202-898-0089