The Taxman Cometh

During past trying times, the sign industry has often shouldered an undue burden. During World War II, sign companies frequently lacked materials because metals, plastics and other components vital to manufacturing were funneled into the war effort. During the energy crisis of the 1970s, the government pointed the finger at electrical signs and deemed it an excessive drain on thinly stretched resources. The late John Lamb, founder of Cincinnati Sign Supply and a longtime, staunch industry advocate, played a key role in sparing the industry further regulation thanks to his testimony before Congress.
Now, the local governments of Los Angeles and West Hollywood (CA) have raised the specter of enacting heavy taxes on the billboard and out-of-home sign markets. Both have approved such taxes for the ballot for next March’s local elections. West Hollywood would levy a tariff of 7% on all revenues generated from billboards, video displays, tall walls and other off-premise signage, and Los Angeles would impose a 12% tax.
Presumably, such action by activist groups (Sunset Strip Inc. spearheaded the tax’s approval process to West Hollywood’s city government, it’s unknown who pushed the Los Angeles initiative) stems from the actions of Kayvan Setareh, a Los Angeles businessman who installed supergraphics in Los Angeles without a permit earlier this year. But, to penalize the entire industry for such misdeeds equates to swatting a fly with a sledgehammer.
In a state where foreclosures and building vacancies rank among the nation’s highest, one would think wrapping or installed a billboard atop an unoccupied building would be a favorable alternative to urban blight.
Off-year, primary-season elections tend to favor activists who are more likely to vote. It’s imperative that billboard and sign companies fight to ensure these heavy taxes don’t pass. Times are tough, but it should never be incumbent upon any industry to shoulder a disproportionate load.