Issue Background

Preserve 100% Deductibility of Advertising Expenditures

This outcome will:

  • decrease economic activitiy of a $6 trillion dollar industry.
  • reduce marketing effectiveness for small businesses.
  • curtail use of all advertising media including promotional products.

Despite the historic 100% deductibility of advertising expenses for business, recent tax reform proposals would allow only 50% of advertising expenses to be deducted in the current year, with the remaining 50% amortized over five years or more. The promotional products industry opposes these proposals. 

Amortizing advertising deductions over the course of five or more years could result in curtailed use of all advertising media including promotional products. This outcome will decrease economic activity and reduce the effectiveness of the $6 trillion advertising industry.  The long-standing treatment of advertising costs as fully deductible in the current year has been a component of business success since the inception of the tax code. We urge Congress to preserve the current standard.