Under advertising provisions of the proposal “a taxpayer must capitalize and amortize 50 percent of its specified advertising expenses over a 10-year period, beginning with the midpoint of the tax year in which the expenses are paid or incurred. The remaining 50 percent of a taxpayer’s specified advertising expenses may continue to be deducted in the year paid or incurred (as under present law).” The proposal provides an exemption from the capitalization requirements for taxpayers with advertising expenses of less than $1 million in a taxable year.
This proposal, if enacted, would have a devastating impact on the advertising and media businesses as well as the economy as a whole. AAF will continue to educate lawmakers as to the value of keeping advertising as a fully deductible business expense in the current year, and urge them to oppose any changes to that status. We urge all AAF members to contact their Representatives and tell them to oppose this provision of the tax reform plan.
Tax reform, and threats to advertising deductibility, will be a major topic of discussion at AAF’s Advocacy and Action: Advertising Day on the Hill on March 11 and 12. One of the featured speakers will be Rep. Mike Kelly, R-Penn., who sits on the Ways and Means Committee and will talk about the prospects for the tax reform package.
This is your opportunity to learn about tax reform and other issues confronting the advertising industry – and then tell your elected representatives where you stand.