American Advertising Federation of Des Moines

AAF Alert – Tax Reformers Continue to Consider Advertising Deductibility

11/17/2013

House Ways and Means Committee Chairman Dave Camp, R-Mich. is continuing in his attempt to draft major tax reform legislation. Sources from within the committee indicate that the limitations on the deductibility of advertising may be worse than anything the industry had feared. According to multiple reports the current proposal would only allow a 50% deduction of advertising expenses in the first year, with the remaining 50% to be amortized over a period of ten years. This would have a devastating impact on the industry and economy as a whole.

House Ways and Means Committee Chairman Dave Camp, R-Mich. is continuing in his attempt to draft major tax reform legislation. Sources from within the committee indicate that the limitations on the deductibility of advertising may be worse than anything the industry had feared. According to multiple reports the current proposal would only allow a 50% deduction of advertising expenses in the first year, with the remaining 50% to be amortized over a period of ten years. This would have a devastating impact on the industry and economy as a whole.

AAF has issued an alert to our membership, urging them to contact their members of Congress asking them in turn to contact members of the House Leadership and Ways and Means Committee and express opposition to any limitations on the deductibility of advertising expenses.

The tax reform effort, however, does appear to be slowing. After a meeting with the Republican leadership of the House of Representatives Chairman Camp seemed to acknowledge that any tax reform bill will likely not be moved out of the committee by his previously stated goal of the end of the year. When asked about the timing after the meeting he stated, “I’m not going to make a prediction on that right now.”

Congressional leaders are reportedly reluctant to address such a potentially controversial proposal in the upcoming election year. They may also have concerns that the reform effort will distract from other legislative and political priorities.

The issue continues to garner wide attention across the country. AAF EVP-Government Affairs Clark Rector was recently interviewed on talk radio in Florida to discuss the issue.

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