• Ad Age, Thursday, January 5, 2006 11:45 AM

Advertising industry trade groups are up in arms over a surprise proposal by the Pennsylvania legislature that would result in a 6 percent sales tax on advertising. An attempt by the Pennsylvania House of Representatives to cut state property taxes, the move prompted an outcry from advertising and media groups. "When you start to impose a burden on the selling process, it's highly likely to be counterproductive," said Dan Jaffe, executive vice president of the Association of National Advertisers. He said advertisers might simply shift their spending to media outside Pennsylvania or spend their advertising money elsewhere, as was the case in Florida, which a decade ago passed a similar advertising tax, only to immediately drop it. Jaffe added that the ANA will join broadcasting and newspaper groups in the state to warn that the tax could have significant impact on the state's economy. He said a study by the advertising industry shows Pennsylvania generates $225 billion each year and 885,000 jobs from advertising.

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