Ad groups said the tax, half the 6% originally proposed, would put Connecticut agencies at a disadvantage, but the impact won't be entirely clear until the state issues rules for how the tax will be imposed.
Linda Dove, senior vice president
There was disagreement on how much revenue the Connecticut tax will generate. Ad groups arguing that some parts of state ad production are already taxed said the new tax will generate less than $1 million, but state officials are counting on far more.
The new ad tax was part of an emergency effort to fill a gaping hole in the state budget as the economy cut revenues. While the tax is effective through the end of the fiscal year, what happens after that remains uncertain. Gov. John G. Rowland has unveiled a budget proposal for the next two years that proposed $1.1 billion in cuts and consolidations.
Hired a lobbyist
Ad groups said they have hired a lobbyist to fight keeping the tax after the current budget year.
The Connecticut action comes as several states hurt by the economy look to new ways to raise revenues or cut costs.
In some of the latest examples, the Association of National Advertisers warned about legislation introduced in Arkansas and Nebraska calling for applying the state taxes to advertising services.