CINCINNATI - The governors
of Minnesota and Ohio are floating the idea of taxing advertisements to bring
in needed cash, Advertising Age reports. Under Ohio Gov. John Kasich??s budget,
billboard, print, radio and television ad sales would have a 5% sales tax.
"The whole purpose of
advertising is to generate sales," said Dan Jaffe, executive vice president of
government relations for the Association of National Advertisers. "So if you're
becoming more reliant on sales taxes, you shouldn't be doing anything to stop
an effort to sell."
Kasich wants to enlarge
the state??s sales tax so he can decrease taxes on businesses and personal
income. Ohio has until July 1 to approve the governor??s budget, and the ad tax
has bipartisan support.
In Minnesota, Gov.
Mark Dayton??s budget would extend the state??s 5.5% sales tax to numerous
business-to-business services, which would encompass advertising. "We certainly
are going to oppose any tax that has an impact on our clients' marketing
abilities," said Steve Arndt, CFO of Campbell Mithun.
Meanwhile, over in
Louisiana, Gov. Bobby Jindal has indicated he might put forth a budget with the
state sales tax on advertising to nix the corporate taxes and personal income
tax.
This isn??t the first time
states have attempted to tack on sales tax to ads. Back in 1987, Florida
started taxing ads, but repealed the tax when national advertisers yanked
conventions and canceled ads in the state.
"If something of this
magnitude is taking place in the states, they certainly would be aware of it in
Washington," said Jaffe. "We're keeping ourselves on high alert."