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Editor's column: You can’t sell me on an ad tax

February 23, 2013
By Per Peterson , Marshall Independent

I went to bed one night earlier this week thinking about Gov. Mark Dayton's sales tax proposal. I know, pretty sad, right? This is my life.

As I fell into sleep mode, I continued to try and figure out if I'm a fan of Dayton. I can't decide, and I'm not sure I ever will be able to. Some of the things he's done while in office I've applauded on this very page. Others have left me...what's the word?...miffed.

This is one of them:

Dayton's sales tax proposals include expanding the tax to advertising and eliminating the long-standing publications exemption. Most reading this could care less about this specific part of the proposal. I, on the other hand, am scared to death by it. Why? Because it affects newspapers, which, if you care at all about getting your local news, means it could affect you, too.

As the Minnesota Newspaper Association says, an advertising tax is not a new idea, it's just a bad one. Minnesota, if Dayton's plan goes through, would become the first state in the nation to apply a sales tax to the purchase of advertising or similar services. Two states that gave it a shot - Florida and Iowa - repealed it. Forty other states have considered the idea but decided against it. I want Minnesota to join them, and not just because it would hurt the business I've devoted more than half my life to.

According to studies done in the 1990s by Dr. Robert Kudrle, a professor at the University of Minnesota's Humphrey Institute, it was determined that an advertising tax would cost the state almost $300 million in annual business revenues and close to 6,000 jobs, the MNA said.

Republicans don't like much of what Dayton does because, well they're Republicans, and because when it comes to taxes, they believe his actions are not business-friendly. Before studying up on this advertising tax, I didn't agree with them. I'm starting to waver.

A tax on advertising, whether it's through the paper, radio or TV, is anti-business, at least when it comes to luring businesses to Minnesota. Plus, an ad tax would hurt small businesses already in place, struggling to keep their doors open. Many small businesses take part in what's called cooperative advertising where national manufacturers and local retailers share ad costs. A state sales tax on advertising could pose a threat to these agreements. Why would national businesses already freaking out about their bottom lines and some with limited advertising budgets risk diminishing their selling impact in a state that has an advertising tax?

Newspapers play a vital role in communities big and small. In case you hadn't noticed, the industry is taking on water. I used to downplay all the "death of newspapers" mumbo jumbo, partly because I was in denial, party because I think small-town dailies and weeklies will survive the trend. I'm not so sure anymore.

The Internet is whipping our tails because the younger, mouse-clicking generation isn't interested in getting ink on their hands when they read the paper in the morning or when they get home from work. And while I love getting calls from people in their 50s, 60s and 70s telling me how they truly appreciate the act of holding a newspaper in their hands, those calls are few and far between.

Minnesota has more than 340 newspapers that pump out more than 7 million copies weekly, all while maintaining web sites that attract that younger generation. We're playing to two separate crowds who want the same thing. But how much longer are we going to be able to pull it off?

If this ridiculous sales tax goes through, maybe our days really are numbered.



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