The often feared, but rarely seen changes to tax laws that could threaten the ad industry took an actual step closer to reality Thursday. Senate Finance Committee Chairman Max Baucus dealt the ad industry a blow by proposing to allow businesses to expense only 50% of their advertising costs in the tax year they are incurred and spread the expensing of the rest over five years.
The advertising community has been on high alert over proposals in the House to limit or eliminate the advertising tax deduction. Now, all eyes are on the Senate, where Max Baucus (D-Mont.) said Tuesday he plans to release “discussion drafts aimed at closing loopholes” in the tax code by the end of the week. As of late Tuesday, advertising and media lobbyists were frantically trying to figure out what Baucus was planning.
Representatives of South Dakota newspapers and radio and television stations have urged a legislative panel to reject a proposal that would apply the state sales tax to advertising.