Congress Pressed To Keep Full Tax Deduction For Ads


A coalition of 12 groups representing the interests of rural Americans has sent a letter to four key members of Congress requesting that the law permitting businesses to annually deduct the full cost of advertising in the year it is incurred be retained.

In the letter, sent March 9 to Sens. Orrin Hatch and Ron Wyden and Reps. Kevin Brady and Richard Neal, leaders from American Agri-Women, Association of Agricultural Retailers, American Sheep Industry Association, Intertribal Agriculture Council, National Association of Farm Broadcasting, National Association of Wheat Growers, National Black Growers Council, National Council of Farmers Cooperatives, National Farmers Union, Rural & Agriculture Council of America, United States Cattlemen’s Association and Women Involved in Farm Economics said, “Though we certainly support streamlining today’s onerous and complex tax code, the imposition of a new tax on advertising or limiting its current full, first-year deductibility, could damage rural economies and disrupt the distribution of critical local news information.”

For example, farmers, ranchers and residents of rural America have depended on “free, over-the-air radio for nearly a century to deliver local news, emergency notifications, sports information and agriculture market news,” the groups said. “Changes to the tax treatment of advertising would place an undue financial burden on local businesses and their advertising budgets, resulting in less advertising revenue for rural radio stations. This could force radio stations off the air and harm both the productivity and connectivity of rural America.”

The coalition added that the partnership between rural radio stations and local businesses “represents the vital thread that connects rural America. Main street businesses have come to depend on local radio advertisements as an effective means of reaching consumers within their own communities.”

For example, agricultural equipment retailers use radio to inform and encourage residents to shop their latest tractor or combine sale, the groups argued. “Local grocers use radio to announce the week’s latest specials and persuade potential customers to shop at their market,” they said. “These advertisements are vital to the success of their business and should represent a normal and ordinary business expense. If the advertisement tax were to be instated, it would cripple local businesses and directly impact the ability of rural radio stations to provide high quality content.”

In closing, the groups said, “Free radio is an essential and popular communications venue in rural America. Livestock market reports are called into local radio stations every day across the country and well-known agriculture broadcasters remain a trusted source for valuable commodity reporting and updates. Local news, weather and sports reporters are recognized as the respected sources for the needed information that affects decisions and influences the lives of millions of rural residents. The ability of local businesses to provide local radio stations with advertisement revenue ensures the success of both parties and stands as a time-tested and critical partnership in our communities. As Congress continues to consider pro-growth tax reform, we urge you to oppose changes to the deductibility of advertising that would cripple local businesses and directly impact the ability of rural radio stations to provide high quality content.”