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August 3

Event Highlights: Wolves at the Door

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National and Local Efforts to Tax Advertising

On Thursday, July 28, 2016, we were joined by the American Advertising Federation’s legislative affairs guru, Clark Rector, and local advertising and marketing attorneys John Pickerill and Courtney Thompson for our “Wolves at the Door: National and Local Efforts to Tax Advertising” event, hosted by longtime sponsor Fredrikson & Byron, P.A.

John shared a historical perspective of attempts to tax advertising services in Minnesota before we looked to the future. There does not appear to be an immediate threat of a new advertising tax on the horizon, as the state is no longer in a dire financial state and politicians are not scraping the bottom of the barrel to raise funds. However, based on historical data, we know that attempts to tax advertising are cyclical. With the potential for high turnover in the House and Senate this November, we plan to be proactive in educating our state representatives and senators about the importance of our advertising industry and the damaging impact that a tax would have on our livelihood. You will see more information about Ad Fed’s coordinated efforts on this front in the coming months.

Clark then reminded us just how important our creative culture is to the economy in Minnesota. He shared the below chart, which notes that adverting comprises a staggering 16% of economic activity in the state and 13% of our jobs.

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Credit: Clark Rector of the American Advertising Federation.

Clark emphasized that there is a lot riding on the 2016 presidential election. For example, the Democratic nominee, Hillary Clinton, has suggested that she would regulate the pharmaceutical industry’s advertising practices. The Republican nominee, Donald Trump, may be in favor of tax reform that, depending on the specifics, could eliminate certain deductions that agencies and creatives are able to take advantage of under the current tax code.

Clark mentioned that privacy concerns and regulation continue to impact the advertising industry and that the next president will likely influence the direction and application of such policy.

Courtney then explained that you can stay up to date on national and state level legal developments, including tax issues, via the Ad Fed blog (and forthcoming legislative affairs webpage), at topical Ad Fed events or through private or semi-private meetings with Courtney, who has been the Ad Fed Legislative Chair since 2014.

For more information, contact Courtney Thompson at [email protected] or 612.492.7251.