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Home   •   Archives   •   Spokane Edition   —   Special Edition - Tuesday, August 13, 2013


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Important Message from AAF Spokane about potential future taxation on advertising

The following is an important message from American Advertising Federation's (AAF) Executive Vice President-Government Affairs regarding the potential for future taxation of advertising. This would have a significant economic impact. An advertising study was done for each state. Washington state link can be found at: tinyurl.com/lydvnrk.

Contact your senators or representatives today to urge them oppose any tax on advertising.

Congress may soon be taking up the first major reform of the U.S. Tax Code in nearly 30 years. We have learned that Congressional leaders who are drafting the proposal have heard suggestions that the deduction businesses take for the ordinary and necessary expense of advertising costs should be reduced significantly as a way to generate more revenues to help pay for tax reform. To lower corporate tax rates, "some suggest looking [for new revenues] at the deduction for advertising [costs], a commonly used business write-off." (Wall Street Journal, August 2, 2013). This would constitute a tax on advertising and increase the cost of advertising for all businesses, as well as the tax liability for major advertisers.

AAF and the advertising industry is requesting members of the industry and the business community to write, email or call your Senators and Representatives and urge them to oppose any tax on advertising in the form of a limit on the deduction for advertising costs. Ask them to communicate their opposition to taxing advertising to their colleagues on the tax-writing committees. Here is a link to the draft letter: tinyurl.com/ldhcvoz.

Advertising - local, regional and national - generates $5.6 trillion in total economic activity for our country and helps support 22.1 million jobs in the U.S. economy. The stimulus generated by advertising brings jobs and sales to every state and to every congressional district. Even a modest reduction that limits the amount a business may deduct of its total advertising spending could cost the nation 1.6 million jobs and $419 billion in economic sales activity.

The critical message to convey to Members of Congress is that the deduction for advertising costs is not a special preference or deduction. Every business in America is entitled to this deduction, which is classified as an ordinary and necessary business expense. Other ordinary and necessary costs that may be deducted include the salaries of employees, rent for office space, utilities and other costs that a business must pay to keep the doors open and to generate sales. This deduction is for core business expenses and has been permitted since the adoption of the Tax Code in 1913. You should emphasize that you are not seeking a special treatment or exemption - you are asking Congress to maintain the business expense deduction allowed for advertising for the past 100 years.

You can find your member of Congress and a link to his or her website: www.house.gov/representatives/find/.

Senators can be found at the following website: www.senate.gov/general/contact_information/senators_cfm.cfm.

- Clark Rector, Executive Vice President-Government Affairs
American Advertising Federation

District Board Approves Convention Hotel Project

The Spokane Public Facilities District Board of Directors today unanimously approved an agreement with Convention Center Hotel, LLC to develop a nationally branded, high-rise 'convention hotel' on a large parcel of downtown Spokane property.

The Joint Development Agreement allows Davenport Hotel Collection owners Walt and Karen Worthy the use of a full city block just south of the INB Performing Arts Center for a 721-room hotel and a 900-stall parking garage. The hotel will also have 70,000-square-feet of meeting space which includes a 20,000-square-foot ballroom.

"We know that Walt and Karen Worthy will build a first class project that will benefit the entire region," said District Board chairman Mick McDowell. "A nationally branded hotel of this size will allow us to bring more and bigger conventions and will be a shot in the arm for the local economy."

The city block along Spokane Falls Boulevard between Bernard and Washington is currently used for public parking and is designated to be used for Spokane Convention Center enhancements. The District Board says a new convention hotel meets this criterion. The agreement guarantees District ownership of 300 public parking spaces for INB and Convention Center patrons. The District also has plans to connect the new hotel and the Convention Center via a skywalk over Spokane Falls Boulevard and will provide up to $500,000 for any required environmental hazardous substances remediation on the site.

"We are pleased to be able to work with the Worthy's and feel that their vision will enhance our region," said District CEO Kevin Twohig. "We know that this effort by the Worthy Group will put Spokane in a stronger position to compete for convention and tourist dollars by attracting new groups to Spokane."

The Worthy's announced in September 2012 their intention to construct what would be the city's largest building and indicated at the time that the District owned property is the best site.

For more information about advertising on this newsletter, which is read by over 6,000 business people each week, please call 509-838-4080 or e-mail us at info@spokanehowsbusiness.com.

For creative, affordable, effective marketing communications that can make a difference in your business, contact The Clark Company, 509-838-4080.

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