D.C.’s City Council is considering a new tax on the planning, creation, placement and display of advertising in print, broadcast and digital media. The Council will vote on the tax, Tuesday, July 21. DC-based Admirable Devil sent the following to DC Council Members:
Please don’t kick us when we’re down. Our ad agency, Admirable Devil, was born in Washington, DC, in 2016. With high hopes, we have built a small, award-winning agency garnering national recognition for our campaigns for both national brands AND local businesses in the DMV like Infolock (a cybersecurity firm) and Sustainable You (a DC solar company). We employ 3 full-time staff and a small army of freelance talent based in DC, from editors to producers.
The proposed Budget Support Act that the DC Council wishes to vote on July 21 promises a 3% tax on advertising agency services to generate an estimated $16 – $18 million in revenue. The tax would have a deleterious effect on our business. We would need to close our DC offices and relocate to Maryland or Virginia if such a tax was imposed.
Our small business operates on razor-thin margins already, and taxing us for the “effort” of selling advertising is akin to taxing a donut shop for baking and displaying their fresh, delicious delights in their shop window. We tax businesses AFTER a sale has been made, not before.
Here are three reasons why we would appreciate your support in eliminating the 3% tax from threatening our small agency.
Our agency has national brands as clients including Sierra Nevada Brewing Company based in California and South Carolina. Our clients typically work with agencies in NY, Chicago or LA. Our agency would lose business to more well-established ad markets. Only our creative competitiveness wins these national brands. A 3% tax I would have to pass on to my clients would provide one more reason NOT to send business to the DC ad agency market.
Our agency is already on the ropes due to the downturn in advertising spending. Not a single DC-ad agency has gone unscathed by the Pandemic’s impact on the economy. Our revenue is already down over 50% due to the decline in advertising budgets. A tax would be a nail in the coffin for my and many small agencies in this market.
A 3% tax acknowledged by the procurement offices of major marketers like the recently relocated food giant Nestle (Fairfax), would cause them to ignore local ad agencies, public relations, and digital shops. The local creative economy would be crushed, and the talent that has recently relocated here will be forced to leave. Right now DC is fueling a creative talent renaissance and influx, but a 3% tax would immediately chill that growth.
Please don’t kick us when we’re down. Vote no against this Budget. Right now we’re closely watching how DC responds to this Pandemic and the downturn. Taxing small businesses like ours is not a sustainable solution, as we’ll be forced to relocate or worse.
Joel Johnson, Co-Founder, Chief Strategist
Michael Carpenter, Co-Founder, Co-Chief Creative Officer
Bruce Gray, Co-Founder, Co-Chief Creative Officer