Tax Issues May Loom Large in 2021
Regular readers of Government Report will recall that in the winter and spring of 2020 the Maryland General Assembly passed a tax on digital advertising which was then vetoed by Governor Larry Hogan (R). Leaders of the Senate and House of Delegates have stated their intention to conduct votes in the 2021 legislative session to override the Governor and enact the tax into law. Because Democrats hold super-majorities in both chambers the advertising industry is facing an uphill fight to convince enough lawmakers to vote to sustain the veto and kill the tax.
AAF, AAF Baltimore and AAF Greater Frederick are working with Marylanders for Tax Fairness, a broad industry coalition opposing the digital ad tax. AAF members are contacting Maryland lawmakers directly to ask them to vote to sustain the Governor’s veto. AAF Baltimore President Matt McDermott joined with leaders of the Maryland Press and Broadcasters associations to pen an op-ed explaining the importance of killing the tax.
In Washington, State Representative Vandana Slatter (D-Bellevue) has released a preliminary draft of a bill tax would tax digital advertising. AAF has issued an alert to our Washington members urging them to express early opposition to the proposal in the hopes that it will not be introduced.
Given the budget crunch that most states are facing due to the Covid-19 crisis AAF anticipates we could see multiple efforts to tax advertising, either digital or all advertising. Unlike the Federal Government, nearly every state is constitutionally obligate to balance their budgets and cannot run a deficit. As of this writing, it appears likely that any Federal Covid relief bill will not include aid to state and local governments, which only make their search for new sources of revenue more likely.
As expected, Californian voters approved Proposition 24, the California Privacy Rights Act (CPRA), despite the fact that the California Attorney General’s office only issued final regulations implementing the California Consumer Privacy Act (CCPA) in August, which in fact are still undergoing some modifications. AAF and our allied associations continue to submit comments to the AG’s office regarding the CCPA. Upon passage of the CPRA, we issued a statement reiterating our support for the passage of a national privacy law.
As with taxes, privacy is an area that could see an abundance of state activity, especially if state lawmakers believe that no federal law is forthcoming. Privacy is an issue in which national leaders in both parties have introduced legislation. While there are certainly areas of disagreement, such as enforcement mechanisms and state preemption, there is also broad consensus in other areas – including many with industry support.
AAF continues to work with our partners in Privacy for America to advocate for a national privacy standard and we are hopeful that such a law could pass in 2021. Because Congress is so polarized on many issues, privacy may be an area where lawmakers may choose to work together to show constituents that they can “get something done.” As the issue moves forward, AAF grassroots will play in important role in demonstrating that a national privacy standard is an issue that has strong local support.
AAF Plans Day on the Hill
AAF has scheduled the 2021 Advertising Day on the Hill for Wednesday, May 19. The event will be held in conjunction with the Leadership Immersion Training for Rising Professional Club Presidents and Presidents-Elect on May 18. We are optimistic that the vaccine rollout will allow us to gather in Washington, DC so please mark your calendars and plan to join us for these important events.
Finally, we wish you a Happy and Healthy Holiday Season and look forward to working together in the New Year.