Two major arenas of legislative concern are Taxation and Privacy issues relating to advertising, both nationally and locally. Pending results of 2020 elections, both issues are ‘hot spots’ to watch in 2021.

Taxes on Advertising

Federal Ad Tax – Deny deduction of advertising as a current business expense in filing federal income tax.*

Draft legislation circulated in both U.S. House Ways & Means and Senate Finance Committees (2013-2017).
- Tax advertising by denying 50% of advertising as deductible business expense in current year.
- Amortize balance of 50% in current year advertising expense over the following 5 or 10 years.
Successfully defeated draft legislation in committee; no federal ad tax included with Tax Cut and Jobs Act (TCJA-2018).
- IAF with Idaho Ad Coalition members met with Senator Mike Crapo in Boise to oppose legislation as drafted.
- Senator Crapo became first member of Senate Finance Committee to oppose federal ad tax (April 2015).
Subsequent ad tax bills have been introduced targeting advertising in specific industries, i.e. DTC advertising.

*Example: $1 Million annual ad spend = 50% deducted @$500k as current expense + $500k expense taxed as income

State Sales Tax

Proposals to impose or extend state sales tax on advertising services and/or media
State budget shortfalls are resulting from economic fallout of pandemic closures.
Arguments against imposing a tax on advertising are multiple and compelling (Florida ad tax disaster in 1987).
- IAF does not anticipate sales tax issues to emerge with Idaho Legislature convening in January 2021.
- Idaho is one of only four states nationally reporting that tax revenues have increased during 2020.

Local Issues

Ad tax imposed by city councils to fund local spending deficits, i.e. Washington DC (Introduced and failed July 2020)
Monitor outdoor advertising bans in local markets as proposed by city councils, i.e. Pocatello, Boise, Garden City, etc.

Consumer Privacy Issues

Federal legislation--Contact Tracing included in new federal Stimulus package proposals.
Debate is currently underway as to creating a national U.S. Privacy Policy (vs. piecemealing state by state).

European Union model

General Data Protection Regulation (GDPR)

vs.

U.S. Opt-in/Opt-out model

42 States reported new or active Privacy legislation in 2020.

California Consumer Privacy Act (CCPA)