Washington – The Computer & Communications Industry Association offered written comments and will testify Monday opposing Connecticut’s proposed H.B. 5673, An Act Concerning the Reformation of Certain Taxes and Tax Equity, which would tax revenues generated from digital advertising services.
While CCIA recognizes that policymakers are appropriately interested in the digital services that make a growing contribution to the U.S. economy, CCIA is concerned that proposed taxation, which is targeted to digital advertising services but excludes traditional offline advertising, raises constitutional concerns and risks having broad economic impacts, including on small and medium-sized businesses.
CCIA’s written comments and testimony focus on unintended consequences of the legislation, including the potential for significant harm to smaller businesses. The comments also emphasize how similar proposals to tax digital advertising in other states have raised serious constitutional questions, and as a result, have yet to actually be implemented.
CCIA has advocated for policies that have enabled a competitive U.S. tech industry for 50 years and supports protection of businesses offering digital services across the country.
The following may be attributed to CCIA State Policy Director Khara Boender:
“The advertising industry is a diverse and dynamic space, and consumers today encounter advertisements when they read their local newspaper, tune into their favorite broadcast television or radio program, as well as when they use the internet. In each of these instances, a vendor unites viewers with advertisers seeking an audience by offering compelling content.
“CCIA cautions against singling out businesses offering digital advertising services, and policymakers should provide a rationale if print or broadcast services employing a similar business model would not also be captured in the proposed tax.”