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Stat of the Day: Which Industries Took the Largest Advertising Tax Write-offs?

An Ad Age analysis of newly-released 2008 Corporate Tax Filings

By Published on .

Pharmaceutical companies and their parent industry of chemical manufacturing claimed the biggest tax deductions for advertising in 2008, but mining and utilities got much more bang for their buck. Ad Age looked at recently released IRS data on corporate filings and found the industries taking the biggest deductions and those spending the smallest portion of their profits on ad-related expenses.

Overall, companies claimed just under $10 of net income for every $1 of advertising expense. Mining spent only $274 million but profited $64.1 billion. Utilities spent just $5 million for its $942 million in profit. The "ad to income" index shows the relative bang for buck each industry got, compared to the national average.

Not surprisingly, more competitive industries spent a larger portion on advertising including food, telecom, publishing and media, and the beverage and tobacco industries.

Here are the top 25 industries.

Top 25 Industries (ranked by 2008 advertising expense)
Industry Number of returns Advertising Expense Net Income (thousands) Ad to Income Index
Chemicals (including pharmaceuticals) 5,722 22 ,220,295 91,635,015 43
Food manufacturing 6,580 13,777,180 24,680,243 19
Nondurable goods 70,788 9,152,756 60,231,641 68
Telecommunications (including cellular, cable, etc.) 8,794 8,022,079 28,842,822 37
Durable goods 138,075 7,424,555 51,120,014 72
Publishing industries (except Internet) 13,064 6,983,295 30,736,683 46
Beverage and tobacco products 817 6,795,675 21,604,735 33
Professional, scientific, and technical services 527,611 6,773,757 78,886,735 121
Computer and electronic product manufacturing 7,156 6,591,056 62,730,736 99
General merchandise stores 4,379 6,362,362 22 ,481,932 37
Insurance carriers and related activities 83,858 5,544,689 73,062,067 137
Credit intermediation 26,800 5,449,261 34,238,646 65
Food services and drinking places 118,204 5,259,222 15,406,423 30
Motor vehicle dealers and parts dealers 42,454 4,168,781 8,035,968 20
Nonstore retailers 23,869 3,384,547 6,834,111 21
Broadcasting (except Internet) 2,097 3,381,215 10,132,136 31
Administrative and support services 158,334 3,128,978 20,117,585 67
Motion picture and sound recording industries 14,863 3,077,576 5,920,287 20
Electrical equipment, appliance, and components 3,752 2,980,603 20,976,316 73
Clothing and clothing accessories stores 26,037 2,902,409 8,189,004 29
Building material and garden supply dealers 22 ,726 2,685,627 10,235,317 40
Food, beverage and liquor stores 53,514 2,377,654 9,450,753 41
Miscellaneous manufacturing 16,923 2,181,777 19,002,839 91
Accommodation 13,763 2,148,859 7,144,925 35
Educational services 27,981 2,133,626 4,472,703 22

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