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10/24/2017

Advertising Deductibility

About the Issue

Advertising has long been the foundational core of our nation’s free local broadcast system. And stations still rely primarily on advertising as their primary source of revenue. Currently, businesses can deduct the full costs advertising as an ordinary and necessary business expense. Any changes to this tax treatment of advertising may force a drop in advertising revenues that would necessarily threaten the viability of North Carolina’s local radio and television stations to invest in the very local programming – including local news, public affairs and emergency information – that is so important to local communities.

Advertising also is a proven job-creator throughout North Carolina’s economy. It triggers both direct and indirect economic impacts through increased demands for products and services generated by advertising which, in turn, triggers increases in consumer spending.

In North Carolina, the advertising helps generate $149 billion in economic activity (or 15.6% of all economic activity in North Carolina) and more than 500,000 jobs (or 12% of all jobs in North Carolina). Each $1 million spent on advertising in North Carolina generates 62 jobs.

Earlier this year, 5 Members of the North Carolina Congressional Delegation—Richard Hudson,
G.K. Butterfield, Alma Adams, David Rouzer, and Ted Budd—joined a bipartisan letter to the House leadership in opposition to any changes to the deductibility of advertising.

President Trump and GOP Congressional leaders have released a framework for comprehensive tax reform. It contains ambitious proposals to create a lower, simplified corporate tax structure – including a 20% across-the-board tax rate and full capitalization of depreciable expenses in the year they are incurred. It is important, however, that Congress not change the full deductibility of advertising as part of this process. Rather, the deduction must remain as a pillar of local economic activity and the continued viability of local broadcast service.

Your station and your local advertisers are critical voices in this debate.

 

What You Can Do

The key tax-writing committees are the House Ways and Means Committee and the Senate Finance Committee. Senator Richard Burr (R) serves on the Senate Finance Committee, and Congressman George Holding (R-Raleigh) serves on the Ways and Means Committee. Contact their offices and make your voice heard.

Contact the other Members of Congress in North Carolina to educate and advocate for keeping the ad deduction.

You can find contact information for each office here.

 

How NCAB Stations Can Help

Below are links to resources that will assist you in your communications with Members of Congress: