January 28, 2024
Sen. Lou Ann Linehan, Chairperson
Revenue Committee
Room 1116
P.O. Box 94604
Lincoln, NE 68509
Subject: Opposition to LB 1354 – “Advertising Services Tax Act”
Dear Senator Linehan and Honorable Members of the Revenue Committee,
The American Advertising Federation Nebraska is writing to express our opposition to LB 1354 before your committee which would establish a tax on advertising in Nebraska. With more than 275 professional and student members, AAF Nebraska is the unifying voice for advertising throughout Nebraska. We are an organization with the purpose to educate, inspire, and bring an inclusive sense of community to advertising professionals in Nebraska so that we, and future generations, can continue the work we love in a state we call home.
Advertising is a driver of the state’s economy, generating over 39 billion in economic activity in Nebraska. Advertising also supports job growth and for every 1 advertising job, there are 75 additional jobs supported.
Nebraska businesses depend on advertising to keep customers informed of their offerings, hours, and more. Advertising in our state drives business growth and spurs the economy, the last thing the Nebraska Legislature should consider is increasing the cost for businesses to reach their customers. This type of punitive tax policy would likely discourage companies of all kinds from innovating, investing, and locating in the state.
In years past, Arizona, Iowa, and Florida each passed broad advertising taxes. Subsequently, each state later repealed the tax because it negatively impacted their local economy and was impossible to administer. In fact, since 1987, when the Florida services tax was repealed, broad advertising taxes have been considered in more than 40 states and rejected in every instance. In addition, LB 1354 contains language similar to Maryland’s Digital Advertising tax bill that is currently the subject of a legal challenge. As with Maryland, LB 1354 will likely face litigation that would cost Nebraska taxpayers millions of dollars.
We urge you and the members of the Revenue Committee to consider the potential adverse consequences of LB 1354 on businesses, job growth, and Nebraska’s overall economic climate. Rather than imposing taxes on advertising services, we believe there are alternative solutions that can meet the state’s revenue goals without undermining our industry and our economy.
Sincerely,
AAF Nebraska
