* From the July 27th edition of Crain’s…
Companies ranging from auto dealers to television broadcasters are gearing up to fight a tax on advertising even before Gov. Bruce Rauner formally proposes one.
Statewide organizations representing businesses as varied as billboard owners, real estate firms and newspapers are launching a pre-emptive strike against part of Rauner’s campaign proposal to generate more than $600 million in annual revenue for the state by expanding the sales tax to some services. An ad tax would produce nearly $38 million a year in tax dollars, according to the proposal.
The tax is at odds with the Rauner administration’s attempts to improve the business climate in the state, the business groups say. Illinois would be just the third state in the nation to apply a sales tax or its equivalent to ad sales.
With the Republican governor and Democratic leaders in the General Assembly locked in a stalemate over the budget, lobbying against the tax now seems like an act of supreme optimism that a deal might be reached. Moreover, Rauner hasn’t even put forward a detailed tax plan to take advantage of the booming service economy.
Yet the tax aspects of any deal could come together quickly, political experts say.
* But why start the project in June? Crain’s followed up today…
“We had never heard anything to substantiate that it was on, that it was off,” said Dennis DeRossett, executive director of Illinois Press Association, which represents about 500 daily and weekly newspapers.
Nonetheless, in June the coalition launched a website attacking Rauner’s proposal, followed by editorials in newspapers that belong to the Springfield-based group.
The website and some of the editorials described the proposal as a nearly 10 percent levy, factoring in both the state-imposed 6.25 percent share of the sales tax as well as the local portion. (In Chicago, the sales tax is 9.25 percent, but is set to rise one percentage point on Jan. 1.)
On June 19, Rauner Press Secretary Catherine Kelly called DeRossett to complain that it wasn’t a 10 percent tax, but a 6.25 percent tax, he said.
Kelly “was adamant that they wanted to get that corrected,” he said.
But the call had an unintended consequence.
“That sort of told us that it was part of the package being considered,” he said.
For the original Crain’s report, Kelly declined to comment, except to say in an email that the proposal “is from the campaign and the administration has not proposed any new taxes at this time.” She did not return messages requesting comment for this story.
Anybody who has ever dealt with the Rauner press shop knows those folks are about as nitpicky a bunch as you could ever possibly imagine.
So I could definitely see “ck” or Lance reaching out about a mistake like that, particularly when it conflicts with the governor’s perceived anti-tax stance.
I don’t believe a service tax is in play until they get to a capital bill. I suppose it could be part of the budget, but I don’t see how it could be because it would take so long to implement.
But, whatever. It’s their money.
* Also, for the record, I am officially neutral on an advertising tax. I doubt it would hurt my sales and if the cash is used for a capital plan then so much the better.
And while I’d love to see a sales tax imposed on campaign advertising, I can understand why the struggling newspaper industry would be freaked out about this. Then again, newspapers are already exempt from sales taxes on their newsprint, ink and printing machinery. Plus, lots of papers publish those lucrative and mandatory “official notices.”