Alex Propes, Vice President of Public Policy, IAB, issued the following statement in response to the introduction of New York Senate Bill 8166, which would expand the New York sales tax base to include receipts from the sale of digital advertising services:
“IAB strongly opposes New York Senate Bill 8166. The economic harm to New York’s economy resulting from this misguided legislation would far outweigh any purported benefits.
Digital Advertising is the stimulus for economic activity in every sector across the state. IAB research from 2017 found that digital advertising contributes $85 billion to New York’s gross domestic product and supports over 243,000 full-time jobs in the state.
This tax would significantly increase the costs for businesses to advertise. As a result, it would starve the news publishers, media companies, and digital services that New Yorkers rely on from essential advertising revenue. SB 8166 amounts to a tax on knowledge and would reduce the availability of vital content and services.
This proposal would be especially detrimental New York’s small business community, as digital advertising is the most cost effective method for businesses with limited marketing budgets to reach their customers.
Furthermore, this tax raises significant and well documented constitutional and legal concerns. If enacted, the New York government will be forced to spend taxpayer dollars defending a misguided and doomed law.
Considering the negative consequences of this proposal, we urge the New York State Legislature to reject this legislation.”