Dear Nebraska Senator,
I am writing to express my strong opposition to any proposed advertising tax during the special session called by Governor Jim Pillen. As a resident and engaged citizen of Nebraska, I believe that such a tax would have significant negative consequences for our local businesses, consumers, and the broader economy.
Advertising is a vital tool that businesses—both large and small—rely on to reach customers, promote their services, and remain competitive. Imposing a tax on advertising would increase costs for these businesses, many of which are already struggling to recover from the economic impacts of our struggling economy. This tax would likely lead to higher prices for consumers and reduced advertising spending, leading to fewer sales and ultimately harming our state’s economic growth.
Moreover, a tax on advertising could disproportionately affect small businesses, which are the backbone of our local economy. These businesses often operate on tight margins and depend heavily on affordable advertising options to attract customers and stay afloat. An advertising tax would place an additional burden on them, making it even more challenging to succeed in an already competitive market.
For example, let me give you a scenario for a small home services company with an average ticket cost of $5,000. Let’s say based on his monthly revenue, they spend $500 on Facebook or Instagram to generate about 25 leads per month ($20 cost per lead). With that, they average a closing ratio of 20%, giving this business about $25k in revenue. With the added 7.5% tax, the actual ad spend would have to drop to $462.50 to account for the added tax. With an average cost per lead of $20, he is now getting about 23 leads per month and at the same closing ratio, would drop to 4 jobs per month or a monthly revenue of $20k.
In 1987, Florida tried to tax advertising and it had such a negative impact that a special session was called six months later to repeal the tax. Maryland is currently still battling their digital ad tax in court to determine if it is Constitutional. Learn from history and oppose any legislation that includes an advertising tax.
Please support your constituents who work in, and benefit from, the advertising industry by not taxing advertising through any medium.
Sincerely,
