New Jersey Broadcasters Association President Paul Rotella has signaled the NJBA’s strong opposition to any changes to the deductibility of advertising, as being considered by the House Ways and Means Committee in Washington this week. In a letter to New Jersey’s Congressional delegation, and in particular Congressman Bill Pascrell, who sits on the committee, Rotella joined 49 other state broadcaster associations who are opposed to this proposal: “Given our mutual support of the vast and diverse listening audiences that comprise your constituency, the NJBA respectfully urges you to reject any measure that would alter or eliminate the current law that permits a business to deduct the full cost of advertising in the year it is incurred.”
He added that this is not just a “commercial” issue for broadcasters: “Broadcasters take their responsibility as First Informers very seriously”, he said, “And unlike Public Radio, which is subsidized by Government funding, commercial broadcasters rely heavily on advertising revenue to produce and deliver vital news, emergency information and high-quality entertainment to their local communities, 24-7, and free of charge. The revenue from advertising is the only way in which broadcast stations can provide, fund and maintain the existing broadcast infrastructure absolutely necessary to provide the citizens of the United States with ubiquitous emergency alerts and critical warnings, free of charge. Any modifications to the tax treatment of advertising will have a significant deleterious impact on local television and radio stations, our audiences, and those community businesses that rely on broadcast advertising to sell their goods and services…”
A growing coalition of industries, including press associations and Broadcasters are warning lawmakers that the basis of advertising expenditures are such that they are the “lifeblood” of many businesses thereby establishing their “brands” to the public and stop confusion in the marketplace. Any government action to make such businesses “second guess” their decision to run advertising (as this propose bill would do) would be perilous to the continued success of most businesses.
He concluded: “This issue is important enough to our local communities that all 50 state broadcasters associations are asking their Members of Congress to please preserve the full, same year, deductibility of all advertising costs under the federal tax code. The NJBA respectfully urges our congressman delegation to please do the same.”
RBR-TVBR observation: There are plenty of reasons that states should give sales/ad tax exemptions to broadcasters. Simply providing free entertainment programming is a public service, and that even includes bringing nationally known broadcast talent into a small market for free.
More specific reasons include:
1) Serving the public, especially in time of emergency.
2) Providing free public service announcements
3) Providing a voice for local political views and candidates
4) The free provision of local and national news
5) The free provision of regular weather reporting
6) The free provision of public affairs programming, especially but not limited to the local level
7) Providing a venue upon which local businesses can efficiently advertise their goods and services and thereby contribute to a healthy local economy.