The Association of National Advertisers and the Advertising Coalition have released a study that addresses the harm that ad tax efforts in Congress would do to the economy if implemented. Currently, ad expenses are fully deductible. Under discussion in the Senate Finance Committee is a provision that would allow advertisers to deduct only 50% of all ad spend and require the balance to be amortized over five years. Currently, advertising is treated as an ordinary and necessary business expense, fully deductible in the year in which they are made. That proposal is from Sen. Max Baucus (D-MT). A similar is proposal from Rep. Dave Camp (R-MI) would mean a 10-year amortization period for half of a company’s ad spend.
The study says these ad tax proposals would diminish sales, job creation and business investment—and potentially put 1.7 million jobs at risk here in the US. As well, the effects of a new ad tax would be felt nationwide across all business sectors.