By Micha Green
AFRO D.C. Editor
Like several industries, media companies are working to recover from the economic effects of coronavirus, and one way is through the economic boost of advertising. However, on July 7, the D.C. Council granted preliminary approval of a three percent sales tax on advertising that could be highly detrimental. With the Council proposing an $18 sales tax less than 18 hours before unanimously voting in support of it (not even allowing for public opinion), media companies are concerned about losing advertisers and, ultimately, their abilities to survive. Further, with solely two African-American papers having survived in the District of Columbia in the last few decades, the rise in advertising tax poses a threat to the overall sustainability of Black press in the nation’s capital.
Advertisements drive sales for most media outlets. With many businesses decimated from the impact of COVID-19, companies are being forced to pull their advertising dollars creating a domino effect for media companies that have already resulted in widespread furloughs.
The D.C. Council proposed legislation to institute a three percent sales tax on advertising sales. (Courtesy Photo)
According to Poynter, The Washington Times implemented 10 percent pay cuts and most freelance workers were suspended.
Popular, Emmy-winning traffic anchor Julie Wright, who was most recently at the local ABC affiliate and prior to that had spent 17 years at D.C.’s Fox 5, announced she had been laid off as a result of the pandemic.
“The uncertainty of the pandemic has left not only your loved ones and some of your family members without a job, but me too. Today was my last day at ABC 7. It’s a result of the pandemic. It’s unfortunate. It stinks. You know, you have family members going through it, or maybe you’re going through it as well- and it stinks,” Wright said on Instagram on May 29.
Like ABC 7, the Washington Times and many other places, the AFRO has had to make temporary staffing amendments with the loss of advertisers during the pandemic. With the current financial strain on all companies and businesses, the Council’s proposal, introduced by Council Chair Phil Mendelson, of a three percent sales tax will certainly result in the loss of more advertising dollars. Further, as noted in an editorial by Denise Rolark Barnes, publisher of The Washington Informer, the sales tax poses an even further threat to the Black press in D.C., as there are only two African-American owned publications left in the nation’s capital.
“Less than two decades ago, D.C. was flush with national and local media. We have watched these institutions die at an unbelievable rate. There were more than a dozen Black-owned publications in D.C. Today there are two — The Washington Informer and the AFRO,” she wrote before further expressing her frustrations with the proposed tax.
“We are disheartened by Chairman Mendelson’s proposal to create a tax on advertising — the life-blood of media — and the Council’s unanimous approval. While other jurisdictions across the country have proposed similar measures, nowhere does a tax on advertising exist. And, to do so without public input is questionable.”
With less than a week left, media companies, arts organizations and business leaders are lobbying the Council to reconsider their decision.
The D.C. Council is scheduled to officially vote on the ad tax on July 21.