Advertising Deductibility Update from Capitol Hill

There are several tax reform-related takeaways following Republicans’ inability to pass healthcare reform legislation out of the House of Representatives. Beyond proving that major legislative changes are easier said than done and illuminating the factions within the GOP conference, failure to repeal the Affordable Care Act leaves in law several revenue-generating healthcare tax policies. These provisions, if repealed as part of comprehensive tax reform, must then be offset, putting additional pressure on the tax writers to find “pay-fors.” At the same time, the Trump administration and key Republican congressional leaders are refocusing their efforts to unify their party and deliver a political victory in the form of tax reform. Although House Republicans have a public outline of their preferred approach to tax reform, which would lower rates and feature full business expensing but limit import deductions, many believe that President Trump and his administration will ultimately take the lead on tax reform. Taken together, the political stakes for tax reform have been raised, but the process and substance have become more difficult. For advertising deductibility, exposure still remains and likely has increased as a result of the healthcare failure and political pressure to just get something done. NAB, working with our state association partners and D.C.-based advertising coalition, has supported Reps. Kevin Yoder (KS-03) and Elliot Engel (NY-16) and their letter to House leadership opposing any changes to the tax treatment of advertising. This bipartisan letter closed with 124 members publicly supporting our position on advertising deductibility. Additionally, to supplement our existing broadcast advocacy and broad-based advertising coalition efforts, NAB has launched a grassroots business coalition – Businesses Against the Ad Tax (BAAD.tax) – to educate, engage and activate local businesses around the country on advertising deductibility throughout the tax reform process. NAB will continue to build on these efforts to protect advertising as a bottom-line issue for all broadcasters.

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