A group of businesses in Florida is funding three TV and radio ads contesting a legislative proposal to impose a state sales tax on TV, newspaper and radio advertising.
The Coalition to Protect Florida's Economy, which includes the Florida Association of Broadcasters, last week began airing ads with the tagline, "Ax the tax," in English and Spanish. There are 10-, 20- and 30-second versions.
The legislative proposal would put a constitutional amendment on the November ballot that asks voters to decide if the state should remove several tax exemptions.
An advertising tax would likely cost radio and TV broadcasters an estimated $236 million a year and Florida newspapers an estimated $141 million a year.
With some 40 states strapped for money, advertising lobby groups expect to see similar efforts crop up in other legislatures. Oklahoma Gov. Frank Keating is floating a draft proposal involving a tax on outdoor advertising and direct marketing; Minnesota Gov. Jesse Ventura is discussing a business tax that may affect advertising.
"This is a signal of the kind of economic stress states are feeling, and they are willing to take political risks to stop the hemorrhaging of red ink," said Dan Jaffe, executive vice president of the Association of National Advertisers.
The ANA and the American Association of Advertising Agencies have sent out alerts to members. The 4A's alert, issued Friday, warned that "national advertising dollars will leave the state," and reminded members that the last time Florida imposed an ad tax, in 1987, advertising in the state fell by 12 percent.
"A new tax, especially on advertising, would be bad for the economy," the alert said. "Less ads mean fewer sales. Fewer sales mean less revenue and fewer jobs."
"States have to raise money, and of course they will turn to taxing services," said Linda Dove, a 4A's senior vice president.
Wendy Melillo, ADWEEK.COM. January 14, 2002
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