The DC Council gave final approval this week to a $16.8 billion budget for Fiscal Year 2021 after abandoning a proposed 3 percent advertising tax on businesses and associations.

After opposition from ASAE and numerous other business leaders who argued against new taxes on businesses struggling through the ongoing COVID-19 pandemic, DC Council Chairman Phil Mendelson reversed course last week and withdrew the proposed ad tax. Mendelson’s amended proposal redirects $11 million to pay for capital projects in cash and reduces an increase in spending on community mental health services by $4 million, among other cuts.

ASAE was part of a coalition of local business interests and associations that mounted opposition to the advertising tax. Following the July 28 Council vote, the coalition issued a statement that read, “We strongly commend the Council of the District of Columbia for removing the advertising and personally identifiable information sales tax from the FY 2021 budget. This proposed tax would have created a substantial barrier for economic recovery and job creation in the District. Its removal provides a far better environment for the many large and small business and media entities struggling to recover from the impacts of the COVID-19 pandemic. We very much appreciate the Council’s willingness to carefully examine these critically important issues and to develop alternatives to meet the District’s budget challenges.”

In letters to Mendelson and other DC Council members, ASAE had many questions about how the new tax would have been calculated. The Washington Post and other media outlets also lodged complaints. The legislation would have defined advertising services as “the planning, creating, placing or display of advertising in newspapers, magazines, billboards, broadcasting and other media, including, without limitation, the providing of concept, writing, graphic design, mechanical art, photography, and production supervision.”