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Tax Law

The Nation’s Capital Goes [M]Ad: D.C. Council Reverses Course, Considers Eliminating Proposed Advertising Tax

During the July 21st Legislative Meeting, the D.C. Council voted to postpone consideration of the Fiscal Year 2021 Local Budget Act of 2020 (“LBA”) (which establishes the expenditures of D.C. revenue) to Thursday, July 23rd at 12:30 p.m. Prior to that meeting, the D.C. budget office will attempt to trim $18.4 million from the LBA, which will allow the Council to later eliminate the proposed sales tax on advertising services from the Fiscal Year 2021 Budget Support Act of 2020 (“BSA”). It is unclear whether the Council would also eliminate the proposed sales tax on sales of personal information.

A proposed amendment to the LBA (along with a forthcoming amendment to the BSA) is also pending, in case the D.C. Council does not eliminate the advertising tax. Chairman Mendelson proposed a funding reduction to the D.C. libraries budget in order to remedy an unexpected impact of the advertising tax. He expressed surprise that, as written, the tax would apply to each step of the advertising process. Instead, he explained, “the intention of the tax was only to apply to the placement and display of advertisements, and not on the planning or creation of those advertisements.” Without proposed language, it is not yet known whether the proposed fix would be to amend the definition of “advertising services” or incorporate a specific sale for resale exemption.

The Eversheds Sutherland SALT Team will continue to follow the breaking news on these potential taxes as it unfolds over the next week.


Join Todd Lard, Charlie Kearns and Stephanie Do from the Council on State Taxation (COST) on Wednesday, July 22 at 3:00 PM ET for a webcast discussion on the technical aspects and current status of the District’s proposed advertising services and personal information taxes.

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