Put jobs at risk: Advertising supports 149,579 jobs (19.9% of all jobs in the District). Imposing a new ad tax at a time when businesses and families are struggling will put many jobs in jeopardy.1
Raise costs for businesses and consumers: The measure will adversely impact virtually every D.C. employer that advertises. The tax may also be a burden for small companies and community media who face higher costs to operate in D.C. than their counterparts in Virginia or Maryland. Given the intense competition amongst small business in the region, a tax leading to higher costs for District businesses is counterproductive and passes additional costs to consumers.
Create undue tax collection burdens: Due to the complexity of taxing advertising and data activities within the District, this measure leaves it up to the tax collectors to make up rules determining who pays the tax. Complying with this tax is extremely difficult, complicated, time-consuming and expensive.
What’s more, advertising service providers, especially ones such as local newspapers, have no experience handling sales tax collection when they sell advertising space to a customer. These small advertisers will have to make substantial investments to become “tax collectors” rather than using very limited resources to keep their businesses afloat.
Failed: Taxes on advertising have been considered in 40 states and localities in the past five decades. Each one has been uniformly rejected or abandoned as economically unsound and counterproductive.
1 IHS Economics & Country Risk: Economic Impact of Advertising in the United States (March 2015)
