Media buy tax dropped, but advertising services still on the table

Media buy tax dropped, but advertising services still on the table

When Gov. Bobby Jindal unveils details of his tax code revamp to lawmakers today, it will not include a new tax on media advertising buys, says American Advertising Federation of Baton Rouge President Hunter Territo. At least, that's what Territo says he was told by Department of Revenue representatives at a meeting Wednesday.

"However, it looks like advertising services, along with a list of other professional services, will be subject to a new tax," Territo says. "So while someone who is selling advertising might kind of breathe a sigh of relief, the firms that provide the creative services for the ads—which fuels the media buys—are going to be hurt by this."

Territo says a new tax on advertising services will negatively affect small firms in the Baton Rouge area whose revenues come primarily from the creation of advertisements, such as XDesign, where he works.

"But more broadly it's raising the cost of advertising for everybody," he says. "That's going to hurt the economy."
Territo says Revenue Department officials were not able to give him a firm figure on the percentage at which the potential new tax may be set.

The local AAF chapter met with its members and New Orleans area advertisers on Wednesday evening to discuss the meeting with Revenue Department officials and devise a strategy for fighting any new tax on advertising services once the legislative session begins on April 8.

House and Senate tax committees are slated to hear about the tax plan from Jindal today beginning at 10:30 a.m. The presentation by the governor and his leaders on the rewrite effort is expected to include specifics on how high Jindal proposes to raise the sales and cigarette taxes, what services he wants to newly tax, and what tax breaks he wants to remove from the books. The House Ways and Means Committee will begin combing through the proposal next week.

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