Proposal Could Eliminate Advertising Exemption

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WASHINGTON ( -- Ad groups said they will fight a top Florida legislator's proposed plan to seek an amendment to the state constitution to cut the sales tax by a third.

Senate President John McKay, a Republican, said Monday the state is too reliant on a high 6% sales tax for funding and could get by with a 4% rate, if exemptions built up over the years were eliminated.

Mr. McKay said he didn't feel that groceries, residential rent, health-care services, prescription drugs and basic phone service should be taxed, but "other than that, every other exemption will be on the table."

He called the proposal "revenue-neutral" but said any other exemptions would have to fight for their place.

1987 boycott
In 1987 Florida eliminated the exemption on advertising, prompting a boycott of the state and quickly forcing the state legislature to reverse itself.

Today, the Association of National Advertisers and the American Association of Advertising Agencies issued warnings that the new proposal could bring on a similar fight.

Four A's warned the proposal is "1987 all over again," with the prospect that even more services would be affected than in that year.

"The industry is awake and ready to fight," said Linda Dove, the association's senior vice president.

Dan Jaffe, executive vice president of the ANA, said Florida has been particularly hard hit by downturn in tourism and its dependence on the tax to raise revenue.

'Serious threat'
"We have to take this seriously," he said. "We have to focus on this. It's a serious threat."

The proposal still has a long way to go; the amendment needs approval by the state House and Senate, itself an uncertain prospect, then it has to be approved by the voters.

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