From Ad Age

In his long-awaited plan to overhaul the federal tax code, House Ways and Means Committee Chairman David Camp offered advertisers and the advertising industry a $1 million loophole to his proposal to limit the expensing of advertising costs.

But Mr. Camp’s tax plan was greeted with dismay by those who buy and sell ads.

“This is a dreadful idea,” said Dick O’Brien, a top lobbyist for the American Association of Advertising Agencies. “What he’s doing will make advertising more expensive.”

Mr. Camp’s plan would limit the expensing of advertising costs to 50% the first year with the amortization of the rest over 10 years. But the Michigan Republican said he’d be willing to exempt the first $1 million in ad expenses.

“That’s almost meaningless,” Mr. O’Brien said. “It’s a token. Most big businesses spend tens of millions or hundreds of millions of dollars in advertising each year.”

Other industry groups also weighed in.

“Chairman Camp’s proposal is a major new tax liability for businesses that would increase the cost of advertising and cause a substantial disincentive for companies to spend additional advertising dollars,” said the Association of National Advertisers in a statement.

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