ad tax: a wrong choice for wv lawmakers

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ad tax: a wrong choice for wv lawmakers
AD TAX: A WRONG CHOICE FOR WV LAWMAKERS
The West Virginia Broadcasters Association strongly opposes expansion of the state sales tax to include
broadcast advertising. We have carefully evaluated the idea of taxing advertising and must respectfully
oppose taking away the advertising sales tax exemption. If this provision remains a part of the bill, WV
consumers will be paying more for every product and service they buy.
Taxing Advertising is bad for the economy.
Studies have shown that advertising stimulates sales and jobs throughout the economy. Advertising helps
businesses build brand awareness and communicate with consumers. In turn, this triggers a cascade of
economic activity and stimulates job creation. When the cost of advertising goes up, businesses advertise less,
which leads to less consumer demand and purchasing. This slows the economy and reduces government
revenue.
An AD TAX creates an unfair “double tax “or tax “PYRAMIDING.”
Moreover, taxing advertising results in double taxation. Advertising, as a business-to-business service, is not
an “end product” – rather it is an input to the final product. For example, when a car is sold to the consumer,
the cost of the advertising is built into the final purchase price. If advertising is subject to the sales tax, it will,
in effect, be taxed twice – once for the purchase of the advertising, and again in the final purchase price. To the
extent that the tax is passed on to consumers, it will increase the final cost.
An AD TAX sends an anti-business signal and gives unfair advantage to out-of-state competitors.
A tax on advertising would send a strong anti-business message to firms that are considering business
operations in West Virginia. Advertising dollars that are currently spent in West Virginia would be shifted to
media outlets outside the state. When advertising is taxed, taxed businesses are placed at a competitive
disadvantage because of the discrimination they face relative to national and out-of-state businesses whose
advertising purchases may not be subject to the same tax.
Similarly, there is no legal way to require out-of-state advertisers and merchants to remit sales tax on
advertising, goods and services directed at West Virginia consumers. Web-based merchants like Google and
Yahoo would not be subject to the tax, which gives them an unfair advantage over West Virginia companies
competing for the same consumers.
An Advertising TAX failed miserably in Florida.
An advertising tax is not a new idea, just a bad one. Since 1987, 40 states have considered and rejected a tax
on advertising.. Florida enacted a sales tax on advertising, but quickly repealed the taxes because it was
impossible to administer, and it had an adverse economic impact.
A TAX on advertising hinders public access to news and information.
A tax on advertising would reduce the amount of local news, and entertainment available to the public.
Advertising is vital to the dissemination of most of the news, information and entertainment in society
A TAX on advertising is wrong for businesses, consumers, and West Virginia. A tax on advertising would
hurt West Virginia consumers because businesses will pass along the increased cost of doing business when
they can. This is especially concerning since West Virginians are already struggling with the difficult economy.
Thank you in advance for visiting www.noadtaxwv.com
and considering the many reasons why
AN AD TAX IS THE WRONG DECISION FOR WEST VIRGINIA.
QUESTIONS PLEASE CALL:
WEST VIRIGNIA BROADCASTERS ASSOCIATION
MICHELE CRIST, EXECUTIVE DIRECTOR
304-744-2143

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