Capitol - Your Illinois News Radar » Over-reading the tea leaves?
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
Over-reading the tea leaves?

Wednesday, Jul 29, 2015

* 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.

Um, OK.

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.”

- Posted by Rich Miller        

  1. - Anon. - Wednesday, Jul 29, 15 @ 1:06 pm:

    ==Plus, lots of papers publish those lucrative and mandatory “official notices.”==

    It just struck me that notices published in newspayers don’t reach as many people as they should, and probably should be replaced with notices on CapFax so that they reach the people who matter.

  2. - Wordslinger - Wednesday, Jul 29, 15 @ 1:07 pm:

    I wish a “fight” over $38 million in new taxes was significant.

  3. - Cornbelter - Wednesday, Jul 29, 15 @ 1:10 pm:

    Big overreach from the IPA, I am not sure that I would want to draw attention to the fact that the industry is not getting taxed just before a point when taxes will be raised. But I am sure they are PR professionals who carefully thought this out and it is not a ploy to generate membership dues.

  4. - Juvenal - Wednesday, Jul 29, 15 @ 1:15 pm:

    As I recall, the Rauner tax would apply to all advertising and communications consultants, not just the newspapers and broadcasters who provide the final ad space.

    If I recall, the only part of the advertising/communications industry exempted was billboard companies. Hmm, I wonder why?

  5. - AC - Wednesday, Jul 29, 15 @ 1:16 pm:

    Moving back to a 5% income tax seems like it would be much easier to implement for businesses than a services tax, so I can understand the attempt to proactively oppose the services tax.

  6. - DuPage - Wednesday, Jul 29, 15 @ 1:17 pm:

    A subtle threat to newspaper editors to keep in line.

  7. - Liberty - Wednesday, Jul 29, 15 @ 1:21 pm:

    Rauner said a lot of things he didn’t appear to mean.

    Just extend the sales tax to all consumer services. Forget taxing business.

  8. - VanillaMan - Wednesday, Jul 29, 15 @ 1:23 pm:

    Once again, we are seeing how a marketing mentality fails completely to understand the process of government.

    There has been such an acceptance of government running like a business there are few listening about how it really does.

    Sheer ignorance on an expensive scale, yet these same people think they can run governments?

  9. - hisgirlfriday - Wednesday, Jul 29, 15 @ 1:28 pm:

    instead of a 38 million dollar ad tax on businesses that actually employ people and do positive things in this state how about rauner reduces his political ad budget by 38 million and redirects it to the state treasury

    how would a sales tax on campaign ads not wind up being a state restriction on political speech?

  10. - Keyser Soze - Wednesday, Jul 29, 15 @ 1:28 pm:

    As preemptive strikes go, this one is really preemptive. And, probably not a good idea given the current state of the newspaper business.

  11. - Chicago Cynic - Wednesday, Jul 29, 15 @ 1:34 pm:

    I’ll bet you could get a carve-out from the tax.

    “Advertising is defined to mean all digital or print advertising except for any entity run by exceptionally knowledgeable but scruffy males who consume mass quantities of alcohol in pursuit of stories and who are located within a 10 mile radius of the Illinois state capitol.”

    I think that could work. No?

  12. - anon. - Wednesday, Jul 29, 15 @ 1:47 pm:

    I’m all for this as it is long past due. We should also tax legal and consulting fees and bond underwriting fees.

  13. - Modern Love - Wednesday, Jul 29, 15 @ 1:50 pm:

    All Official Notices should be sent to a newly created State “Office of Information” and then published online in an easiliy searchable manner and the data sold to other websites focusing on notice. Putting notices in newspapers and not online does not provide notice to anyone but instead hides actions from the public. This is a simple reform that would be very good on many levels.

  14. - Michelle Flaherty - Wednesday, Jul 29, 15 @ 1:54 pm:

    Funny how all these papers run editorials spurred on by a lobbying group — their lobbying group. It’s good government when it’s their special interest.

  15. - Slide - Wednesday, Jul 29, 15 @ 2:11 pm:

    ~~~ and then published online in an easiliy searchable manner and the data sold to other websites focusing on notice. ~~~
    It’s ‘official gov’t information.’ Once you’ve posted it, it’s in the public domain. It can’t be sold — who’d be dumb enough to buy it??

  16. - Just Observing - Wednesday, Jul 29, 15 @ 2:36 pm:

    I think a lot of people aren’t realizing this is a tax on all advertising, not just newspaper ads, and the tax is paid by Illinois businesses, many of which are struggling to bring in business as it is.

  17. - walker - Wednesday, Jul 29, 15 @ 3:01 pm:

    Our economy is growing in services, while other elements are struggling.

    We are going to have to face this reality sooner or later when it comes to tax policy.

  18. - SAP - Wednesday, Jul 29, 15 @ 4:00 pm:

    == I think a lot of people aren’t realizing this is a tax on all advertising, not just newspaper ads, and the tax is paid by Illinois businesses, many of which are struggling to bring in business as it is. == Exactly. If this was enacted, $1 would buy $0.90 worth of advertising (or $0.9375, depending on who you believe). Less bang for the advertising buck would mean fewer sales.

  19. - Wordslinger - Wednesday, Jul 29, 15 @ 4:07 pm:

    SAP, advertising is a very flexible industry when it comes to pricing, believe me.

    Masters of creative accounting, as well.

  20. - walker - Wednesday, Jul 29, 15 @ 5:54 pm:

    Campaign communications is our fastest growing industry in Illinois.

  21. - DuPage Dave - Wednesday, Jul 29, 15 @ 6:08 pm:

    Illinois needs a common sense service tax. We will never have a graduated income tax, so let’s find services where users can afford to pay the tax. I think advertising in general is a good start. Lots of consultant-type services are ripe for the picking.

  22. - Langhorne - Wednesday, Jul 29, 15 @ 6:26 pm:

    Maybe they need an advertising campaign, in opposition to a tax on advertising.

  23. - Antoinette - Friday, Jul 31, 15 @ 6:20 am:

    Hello, just wanted to tell you, I lovwd this article. It was practical.
    Keep on posting!

Sorry, comments for this post are now closed.

* How Jason Van Dyke's projected 96-year sentence wound up being 81 months
* Pritzker campaign official pushes back hard against latest lawsuit
* Reader comments closed for the holiday weekend
* Question of the day
* Pritzker orders "comprehensive review" of problems, opportunities at state veterans' homes
* SUBSCRIBERS ONLY - This just in...
* It's just a bill
* "Trooper's trooper" laid to rest
* RNUG: Vallas' plan "appears to make Chicago's pension problem manageable"
* Because... Chicago!
* SUBSCRIBERS ONLY - Update to this morning's edition
* What's up with this lawsuit threat?
* It's Time To Put Our Progressive Values Into Action
* Money isn't yet flowing toward Burke's challengers
* Lock up your guns and vaccinate your kids!
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Visit our advertisers...








Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0

Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller