ANA Opposes Ad Tax Proposal in Minnesota

Washington, D.C.; February 27, 2013 - The ANA (Association of National Advertisers) has written to Minnesota Governor Mark Dayton and members of the Taxes Committee of the Minnesota House of Representatives to oppose a new tax on advertising services. The letter is available here.

As part of his FY14 budget proposal, Governor Dayton has proposed reducing the state sales tax rate and expanding the base to cover advertising and other business-to-business services. The Taxes Committee is holding a hearing on the bill tonight.

Dan Jaffe, ANA Group Executive Vice President, stated: “A new tax on advertising services would be extremely harmful to businesses, media and consumers in the State of Minnesota. Particularly with today’s challenging economy, it would be counterproductive to make it substantially more expensive for businesses to communicate efficiently with consumers.” 

ANA’s letter cites a study by IHS Global Insight, a world-recognized economic consulting firm, using a model of the U.S. economy developed by Dr. Lawrence Klein, Nobel Laureate in Economics. The study shows that advertising generates significant sales and jobs in Minnesota -- $109 billion in economic output and approximately 15 percent of the jobs in the state on an annual basis.

Jaffe stated: “An advertising tax is not a new idea, just a bad one. Several states have passed ad taxes but they were all later repealed because they hurt the local economy and were impossible to administer.”

ANA’s letter noted that a new tax on advertising is economically unsound and would result in double taxation: “Advertising is not an end product, such as a bar of soap. Rather, advertising is a communications process, which helps produce the sale of the bar of soap, which is already subject to the state sales tax. Since a portion of any tax on the intermediate advertising process is likely to be passed along to consumers, there would be at least double taxation for most products or services purchased in the state.”

Jaffe noted that a similar tax on advertising has been proposed by Ohio Governor John Kasich. He concluded: “We are working with our members and allied industry groups to sound the alarm in both Minnesota and Ohio that taxing advertising is an administrative nightmare that will ultimately hurt their states.”

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About the ANA

The mission of the ANA (Association of National Advertisers) is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.

Press Contacts:

Luna Newton, CooperKatz & Company for the ANA
917.595.3061 or lnewton@cooperkatz.com 

Marcus Hardy, CooperKatz & Company for the ANA
917.595.3043 or mhardy@cooperkatz.com