As reported by the News Media Alliance (NMA) last week, the House of Representatives and the Senate Budget Committee passed a budget resolution that sets the stage for tax reform legislation that could be adopted with a simple majority under what is called budget reconciliation.
The Senate Budget Committee resolution specifically calls for tax cuts of $1.5 trillion over 10 years. The resounding challenge will be finding revenues to pay for tax cut proposals set forth by the Trump Administration and Republican leadership in Congress; details regarding offsets have not been specified to date.
As the congressional tax committees begin to draft legislation, NMA is concerned that Congress will turn to a damaging proposal that was offered in the last Congress. Specifically, former tax committee chairmen Dave Camp and Max Baucus (both now retired) circulated a proposal that would have required businesses to spread out over 5 years (Senate) or 10 years (House) 50 percent of advertising expenses incurred in a taxable year.
Since its inception 100 years ago, the Tax Code has allowed businesses to immediately deduct 100 percent of advertising expenses. The proposal was included in the draft as a revenue source for offsetting a reduction in the corporate tax rate from 35 to 25 percent.
NMA is adamantly opposed to changing the tax treatment for advertising costs as it will undermine the engine that drives the U.S. economy. Advertising continues to be the most important revenue stream to support newspaper journalism in local communities. NMA has been reaching out to publishers encouraging them to contact members of Congress and ask that they support efforts to maintain the current tax treatment for advertising costs.
For those interested in contacting your representative or senator here is a list of Advertising Tax Talking Points and here is a link to a sample message that you can send to the members of the Senate Finance Committee (U.S. Senate) and the House Ways & Means Committee (U.S. House).
Watch your upcoming Legislative Bulletins or contact CNPA General Counsel Jim Ewert or 916-288-6013 for additional information on how you can help.