Congress should not pass legislation that would make advertising more expensive for local businesses and harm advertiser-supported, free, local broadcasting. Ads on local television and radio stations are treated as an ordinary and necessary business expense – just like salaries, rent and utilities – under the U.S. Tax Code. This means a business can deduct the expense in the year it was incurred.
Some in Congress have suggested changing the tax treatment of advertising and lessening the current tax deduction. Any change to the deductibility of business advertising costs would ultimately make advertising more expensive for local businesses and have a devastating impact on radio and television stations that rely on ad revenue to survive.
For these reasons, advertising should remain fully deductible as an ordinary and necessary business expense in the year the expense is incurred. Broadcasters appreciate and support that the current House Blueprint, “A Better Way for Tax Reform,” preserves the tax deductibility of advertising. As Congress continues to consider tax reform proposals, we urge you to recognize that any legislation that discourages advertising would hurt small businesses, impact jobs and harm broadcasters’ ability to serve their local communities.
1 and 2 Source: Woods and Poole Economics, “Local Broadcasting: An Engine for Economic Growth, 2015”
3 Source: IHS Economics and Country Risk, “The Economic Impact of Advertising in the United States: March 2015”