States Look to Magazine Media and Advertising Industries for Tax Revenue
May 3, 2013
Short on revenue in a still-struggling economy, several states are looking to fill budget gaps by expanding their tax base. Given the possibility of Federal action removing “nexus” protection, keeping magazine subscription sales untaxed is more important than ever. While around half of the states currently tax subscription sales, the largest states, in terms of population, do not.
The most troubling legislative proposal is in Ohio, where a budget bill created by its Governor is working its way through the House and Senate. Among the provisions included in the bill is an elimination of the tax exemption for magazine subscriptions. If approved, this provision would cost publishers with nexus in Ohio millions of dollars.
MPA is engaged on the ground in Ohio, and has succeeded in having an amendment introduced to strip the provision from the bill. MPA will now need to work with legislators on both sides of the aisle and in both houses to ensure that the amendment is included and the language removed.
Also included in the Ohio legislation is a proposal to tax advertising services, which would negatively affect advertising in all media, including Magazine Media. Ohio is not alone on this; gubernatorial legislative budget proposals in Minnesota and Louisiana also include proposals to tax advertising services. MPA is working in conjunction with the advertising community in all of these states to defeat these efforts.