No Local Ad Tax In D.C., But Will Media Be Spared Long-Term?

TV stations and other local media in Washington D.C. are breathing a sigh of relief -- a proposed 3% tax on advertisers for media deals has been given the kibosh by D.C. council officials. 

But is that the end of the story for hard-pressed municipalities, due to COVID-19 expenses and disruptions? Where does the media fit in here?

The Association of National Advertisers were, of course, happy about the D.C. decision. The tax was to be a sales tax on businesses that buy advertising on TV, radio, print and digital outlets.

The D.C. Council has been concerned about its city’s budget and the high cost of the pandemic. Washington, D.C. is not the only city in the U.S. with these concerns. Sinking local economies -- especially with the continuing health issues --- are looking at lower tax revenues from businesses. That is already putting a squeeze on things.



On the other side is the media.

Even before COVID-19, TV stations have had weak results among core mid-size/small TV advertisers -- saved by every other year spike in political advertising.

We are only in July right now. Think what municipal revenue resources will be like around the second or third week in December, when the country will still have some level of COVID-19 fallout, but in the middle of flu season.

Leaving out municipal bond-raising efforts, cities like Washington, D.C. have a couple of near-term choices: Burden TV and local marketers with new business taxes or ding consumers/residents with consumer-targeted retail taxes hikes. Maybe other taxes as well?

Some might say this should be a shared expense.

Bailouts have been given -- or have been proposed -- to a wide range of industries, due to the pandemic. Out-of-work workers have been given big unemployment relief, which may not last the year.

What kind of contribution -- if any -- should local media and those marketers that support them -- make now to their markets, given financial woes?

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