Groups keep up fight against advertising tax
January 1, 2016

As lawmakers in Illinois consider all possible sources of revenue to help alleviate the State’s large budget deficit, the group No Ad Tax Illinois and its partners are hard at work trying to educate decision makers to stop an advertising tax from being brought to the floor.

In Governor Bruce Rauner’s campaign documents, he mentioned the possibility of an ad tax and the estimated $10 million in revenue that could be created by taxing TV, print, and billboard advertising.

No Ad Tax Illinois formed in 2015 to stop an ad tax from being enacted, and the group’s members have not stopped working since. During the summer, they scored support from editorial boards and radio stations across the state. By October, they produced and ran radio and television ads to inform the public about problems an ad tax would cause.

“Education is the key, and one cannot be over-informed,” said Dennis Lyle, president and CEO of the Illinois Broadcasters Association and member of No Ad Tax Illinois. “As long as we can sustain the effort, we want people to know the potential of an ad tax is out there.”

The American Advertising Federation (AAF) is a coalition member of No Ad Tax Illinois and advocates on behalf of advertisers in the state. The AAF has been working to educate and inform lawmakers about the tax’s effects.

“There have been visits [to lawmakers] from constituents, from tax writers, and leadership, and these visits are not just to tell them why it’s a bad idea but why it’s a bad idea in their districts,” said Clark Rector, AAF executive vice president of government affairs. “It’s not just a Chicago big-market thing. Every market that has a radio station would be affected.”

Between 35 and 40 states have proposed the tax, but only one has actually enacted it, according to the AAF.

In Florida in 1987, an advertising tax passed but was repealed six months later. Over those six months, the tax cost 50,000 jobs and $2.5 billion in personal income, according to No Ad Tax Illinois. Purchases dropped 12%, and advertising revenue fell by $100 million. Administrative costs incurred to process the tax exceeded tax revenue, according to the organization.

“The entire Florida case is a debacle,” Lyle said. “History is a great indicator for future planning.”

No Ad Tax Illinois is pushing to get information about the tax out to the rest of the state.

“We need to take care of the situation,” Rector said. “Going in and educating the lawmakers beforehand. That’s something that’s an ongoing procedure. “

No Ad Tax has planned meetings and is awaiting results from its most recent TV and radio ad push. This month, the group expects to know the number of stations that aired the pieces and viewership of the ads.

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— Dan Kolen