Kansas City Considering Tax on Billboard Advertising Revenue

From time to time, it is important for AAF-KC to monitor and sometimes weigh in on important national, state, and local legislative issues that have the potential to impact our industry. Just this week, a situation was brought to our attention by our friends at Lamar and Kuhn & Wittenborn that demands wider awareness among not only our membership but also among the Kansas City advertising and marketing community at-large. Here's the situation as we currently understand it.

• Kansas City Councilman Glover has introduced an ordinance (#120722) to assess a 2 percent tax on outdoor advertising revenues.
• This will appear in rather short order on the agenda of the Planning, Zoning, and Economic Development Committee of the City Council this Wednesday, Aug. 15, at 1:30 p.m. 
• Further testimony will be heard by the Planning, Zoning, and Economic Development Committee of the City Council next Wednesday, Aug. 22, at 1:30 p.m.
• If it passes by a super majority of nine votes, it will appear on the City Council agenda the next day, Thursday, Aug. 23rd.
• If it passes the Council with nine votes, it will be placed on the November ballot and be voted upon by Kansas City, Mo., voters. 

Needless to say, our colleagues at Lamar, CBS Outdoor and other outdoor advertising companies in the area are very concerned.

• Lamar has already issued a letter to their clients informing them of the situation [read the letter here].
• Lamar has also issued another letter directly to the City Council via their attorney voicing their opposition to the ordinance [read the full text here].

So what does it mean for all of us? Our good friend Mark O'Renick of Salva O'Renick toplines the concerns.

"The attempt to tax outdoor advertising is just the start of what I see as an assault on the industry," O'Renick says. "The advertising industry, by and large, has been exempt from transaction-based revenue sources like sales taxes, etcetera. Last year's 'Fair Tax' proposal was just one example. In our research we found that the assessment of sales tax, in particular, was tried in a couple of states, but later pulled.  Taxing services in one state (particularly as rates keep rising) puts businesses in a competitive disadvantage against agencies in states that don't charge similar taxes. The Fair Tax effort has stalled but again I expect more activity as we go along."

According to O'Renick, when it comes to getting involved in legislative activities like these, agencies are actually engaging in a risk mitigation play. By voicing our opinions and concerns during the legislative process so that our elected officials can understand the full weight of the legislation they are considering, we place ourselves in a proactive stance rather than a reactive one where opportunities for action are limited after legislation has been passed.

To this end, our colleagues at Kuhn & Wittenborn have also voiced their opinion to the City Council via a letter regarding the proposed legislation [read the letter here].

While we at AAF-KC have immediate concerns about a tax against revenue from outdoor advertising, the successful passage of such legislation could clear the way for additional taxes against radio, television, print or any other form of revenue made from advertising.

So what can we do now?
We at AAF-KC will continue to monitor and report on the situation, providing relevant information to keep agencies up to speed. However we also encourage our members, both individual and corporate, to make their concerns known to their local City Council members (listed below).

If you would like to get involved, or want more information please contact John Kreicbergs, AAF-KC president, at 913-480-3462 or johnk@meers.com.

Mayor Sly James
City Hall, 29th floor, 414 E. 12th Street, Kansas City, MO 64106
Phone: 816-513-3500 // Fax: 816-513-3518

1st District Councilman Scott Wagner
Phone: 816-513-6503 // Fax: 816-513-1612 // Assistant: Kimberly Randolph - kimberly.randolph@kcmo.org

1st District Councilman Dick Davis
Phone: 816-513-6505 // Fax: 816-513-1612 // Assistant: Jackie Burton - jackie.burton@kcmo.org

2nd District Councilman Ed Ford
Phone: 816-513-6507 // Fax: 816-513-1612 // Assistant: Lisa Minardi - lisa.minardi@kcmo.org

2nd District Councilman Russ Johnson
Phone: 816-513-6507 // Fax: 816-513-1612 // Assistant: Teresa Martinex - teresa.martinez@kcmo.org

3rd District Councilwoman Melba Curls
Phone: 816-513-6511 // Fax: 816-513-1612 // Email: melba.curls@kcmo.org // Assistant: Reva Simmons - reva.simmons@kcmo.org

3rd District Councilman Jermaine Reed
Phone: 816-513-6513 // Fax: 816-513-1612 // Assistant: Petrina Gooden - petrina.gooden@kcmo.org

4th District Councilman Jim Glover
Phone: 816-513-6515 // Fax: 816-513-1612 // Assistant: Erica Torres - erica.torres@kcmo.org

4th District Councilwoman Jan Marcason
Phone: 816-513-6517 // Fax: 816-513-1612 // Email: jan.marcason@kcmo.org // Assistant: Susan Borge - susan.borge@kcmo.org

5th District Councilwoman Cindy Circo
Phone: 816-513-6519 // Fax: 816-513-1612 // Assistant: Travis Levitt - travis.levitt@kcmo.org

5th District Councilman Michael Brooks
Phone: 816-513-6521 // Fax: 816-513-1612 // Email: michael.brooks@kcmo.org // Assistant: Tonia Titus - Tonia.Titus@kcmo.org

6th District Councilman Scott Taylor
Phone: 816-513-6523 // Fax: 816-513-1612 // Assistant: Katrina Foster - katrina.foster@kcmo.org

6th District Councilman John A. Sharp
Phone: 816-513-6525 Fax: 816-513-1612 Assistant: Araceli Gallegos araceligallegos@kcmo.org