Tax reform in full swing
December 10, 2013
By Jessica Conway-Ellis
& Sara DeForge Hough
NNA | Arlington, VA
WASHINGTON—Despite a deeply divided Congress, efforts are still underway to reform the tax code. Specific legislation has yet to be made public, however the National Newspaper Association is aware of two issues important to newspapers that are currently being considered in Congress: the deductibility of advertising costs and the estate tax.
Half of all advertising taxes in the year they occur would not be deductible under the draft proposal by House Ways and Means Committee Chair David Camp, R-MI. The proposal would also require the business to delay the deduction for the remaining half during the course of 10 years, a drastic change in policy.
The deduction of advertising has been considered an ordinary and necessary business expense, and fully deductible, for the past 100 years. Advertising expenses are crucial to keep a business operational and to generate sales, much like the salaries of employees and costs for office space.
Camp has made clear his desire to push for comprehensive tax reform in the current legislative session.
Additionally, the estate tax may find its way back onto the table in the near future. Many opponents to the tax harbor concerns that the estate tax has a negative impact on small businesses, and may affect the ability of a small business to continue past the death of its owner.
There are currently two bills in the legislature, S 1183 and HR 2429, both of which call for a repeal of the estate tax in its present form. Neither bill has seen major action in committee.
The federal estate tax in its current manifestation arose from the American Taxpayer Relief Act of 2012. In its most basic terms, the Act provides for an exemption of USD $5 million indexed for inflation, $10 million per couple. If the value of the gross estate exceeds the exemption amount, the portion in excess of the exempted amount will be taxed at a 40 percent rate, subject to applicable rules and deductions.
If you are interested in learning more about these issues as they move through the legislative process and want to take an active role, please contact NNAWashington@nna.org and become a member of the Congressional Action Team, chaired by Nebraska publisher Deb McCaslin. There is no cost to join and you will receive timely information about how to contact your congressional representatives and make the voice of newspapers heard.
Jessica Conway-Ellis, government relations specialist, may be reached at email@example.com; Sara DeForge Hough, government relations manager, may be reached at firstname.lastname@example.org.