Internet for Growth Calls on Governor Hochul to Protect Small Businesses from a Digital Ad Tax

NEW YORK, March 18, 2025 /PRNewswire/ -- Internet for Growth, a coalition of small businesses, entrepreneurs, and digital creators, has issued an open letter to Governor Kathy Hochul urging her administration to reject Senate Bill S.173, also known as the Digital Ad Tax Act. The bill proposes a tax on digital advertising to fund state unemployment programs—an approach Internet for Growth warns will not only fail to solve New York's employment challenges but could actually exacerbate them by increasing costs for businesses and reducing job opportunities.

"New York is the world's advertising and media capital, yet this tax threatens one of its most vital industries," said Internet for Growth Executive Director Brendan Thomas. "Digital advertising is crucial for small businesses, entrepreneurs, and creators to reach customers, grow, and compete. But it's not just about sales—employers rely on it to find and hire workers. Taxing digital ads will raise hiring costs, worsening unemployment instead of solving it."

Rather than imposing new taxes that burden businesses and hinder job creation, Internet for Growth is urging Governor Hochul and state legislators to explore alternative solutions that support economic recovery without stifling digital innovation.

____________________________________________________________________________

The Honorable Kathy Hochul
Governor of New York
New York State Capitol Building
Albany, New York 12224

RE: Opposition to Senate Bill S.173 – The Digital Ad Tax Act

Dear Governor Hochul,

On behalf of Internet for Growth, a coalition of small businesses, entrepreneurs, and digital creators who rely on digital advertising to grow and compete, I write to express our strong opposition to Senate Bill S.173. This proposed digital advertising tax would have far-reaching negative consequences for small businesses, job growth, and the economic vitality of New York.

New York is the global capital of advertising and media, with the city's advertising industry accounting for 19% of all advertising jobs nationwide. Digital advertising is especially critical for small businesses that cannot afford traditional media. Internet for Growth members rely on digital ads for targeted, cost-effective outreach through publishers on the open web, social media, and search engines. Unlike print, radio, or TV, digital platforms allow businesses to launch campaigns for just a few dollars a day, helping them compete with larger brands and grow their customer base.

Businesses across New York, such as Curtis Lumber in Saratoga County and Macaluso Wealth Management in Albany, illustrate how digital advertising fuels economic growth. Curtis Lumber has expanded its reach beyond physical locations, while Macaluso Wealth Management leverages digital marketing to connect with clients needing financial guidance.

Beyond traditional businesses, advertising powers New York's creator economy, enabling digital influencers and content creators to monetize their platforms, grow audiences, and build sustainable careers. Notably, New York City is one of three global hubs attracting nearly two-thirds of all investment in the ad-supported creator economy, reinforcing the state's leadership in this rapidly expanding sector. A digital ad tax threatens to stifle this progress, raising costs for businesses and creators alike.

Digital advertising is also a critical hiring tool, helping businesses from startups to large employers find and recruit employees. With New York's unemployment rate above the national average, raising hiring costs through a digital ad tax could make it harder for businesses to expand their workforce.

New York already bears the highest tax burden in the nation. Adding a digital ad tax would further strain businesses and individuals, potentially driving investment to states with more favorable tax environments.

With slower economic growth, New York must focus on attracting investment and creating jobs—not deterring them. Worse, these costs wouldn't stop at businesses; they would be passed to consumers, increasing prices for goods and services amid inflation and high taxes. Raising the cost of advertising raises the cost of living.

Rather than undermining a key industry, we urge you to pursue alternatives that foster economic growth while maintaining New York's leadership in advertising, media, and digital innovation. We appreciate your commitment to supporting New York's business ecosystem and stand ready to work with your administration on solutions that drive innovation and prosperity without harming small businesses and creators.

Sincerely,

Brendan Thomas
Executive Director
Internet for Growth

____________________________________________________________________________

Internet for Growth, an initiative of the Interactive Advertising Bureau (IAB), promotes the crucial role digital advertising plays in the success of America's small businesses, helping entrepreneurs bring their ideas to life. With the support of over 700 IAB members including marketers, agencies, publishers, and technology providers, as well as hundreds of small businesses and creators, we highlight the benefits of digital advertising to local economies, expanding opportunities for people of all backgrounds. Our work ensures policymakers across the country understand the limitless opportunity the ad-supported internet provides for creativity, commerce, fair competition, and community.

SOURCE Internet for Growth