A public hearing Tuesday afternoon will address a proposed tax on outdoor advertising transactions, and one company’s response to the proposal.
Pittsburgh Council President Darlene Harris and Councilwoman Natalia Rudiak, whose district includes Brookline, proposed a tax on outdoor advertising—mainly, billboards—as a way to hold multi-million dollar billboard companies accountable for the city services that enable their profits.
But Lamar Advertising Company, the main supplier of billboard advertising in the Pittsburgh area, recently responded to the proposal by using its own billboards to advertise against Rudiak and Harris.
Rudiak argues that the tax is justified because it would provide vital funding for the city’s police department. Tax money would pay for City of Pittsburgh police cars, which, according to the Pittsburgh Council District 4 website, must be replaced regularly at a cost of $2 to $3 million per year.
“Given today’s hard economic times, it is vital that we close tax privilege loopholes that let corporations off the hook,” Rudiak states on the District 4 website. “We all have the responsibility to protect our neighborhoods from crime and neglect.”
According to the proposal, the city would impose a 10-percent tax on the purchase or rental of billboard advertising space. The tax would be collected by the billboard company when the advertiser pays for the space.
But Jonathan Kamin, attorney for Lamar Advertising Company, said Lamar isn’t the only company that would be affected negatively by the tax.
“Ten percent is a pretty hefty tax,” Kamin said. “We think it will have a pretty hefty effect on our business and on those who seek to advertise in the city.”
Lamar began posting billboards against Rudiak and Harris in mid-October.
“Everybody is talking about it as a billboard tax, but what no one understands is this is actually a tax to the user,” Kamin said. “It’s discriminatory too, because they are putting it on this form of advertising but not other forms of advertising. It’s like saying if you choose to use outdoor advertising you’re punished for it.”
Kamin said that when former councilman Doug Shields first proposed the tax last year, representatives from Lamar and from the city discussed the effect the tax would have on advertising in the city.
“We had a number of conversations about how we (Lamar) thought this could be injurious to everyone who does business in city of Pittsburgh,” Kamin said. “In an age when people are trying to make dollars go further, we found this to be devoid of logic.”
According to the District 4 website, Lamar purchased a billboard on Route 51 at Edgebrook Avenue for more than $5 million, but is paying less than $40 per year in property taxes for it.
Kamin said that statement is misleading, and that the $5 million was spent on a bulk purchase in which Lamar bought more than 400 properties, as well as billboard structures.
He said Harris and Rudiak’s statement concerning the amount Lamar pays in property taxes per year is not true.
The billboards are considered personal property under state law, so billboard companies don’t pay property taxes on the signs. But Kamin said Lamar still pays real estate tax on the property—mainly vacant land, he said—that the company owns.
He said Lamar pays between $50,000 and $80,000 a year in taxes to the City of Pittsburgh, and also pays an additional $60,000 per year in permit fees.
Residents will have an opportunity to speak about the issue at Tuesday’s public hearing.
If you’re going:
What: Billboard Tax Public Hearing.
When: Tuesday, Nov. 13, 1 p.m.
Where: City Council Chambers, 414 Grant Street, 5th Floor.
If you want to speak: Call the City Clerk (412-255-2138) to sign up for 3 minutes to speak in support of this legislation.