COLUMN: Unfair Tax Scheme Hurts Local Publishers

tax on facebook ads
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By Joel Grenz

Next time you pop in to your local coffee shop to buy your morning latte, check your receipt. Did you pay tax? What if you bought the same beverage from a large multinational coffee chain instead? Still tax, right?

The big chain coffee company benefits from certain advantages over the mom and pop shop, but not having to charge tax isn’t one of them.

Strangely, this principle doesn’t apply to other transactions and this should concern us all.

As someone who who works in marketing and publishing, I can tell you that when it comes to taxation, the playing field between the local business and multinational corporations is not as level for publishers as it is for that cup of coffee.

If the owner of the local coffee shop were to place an ad with their local newspaper, the fees for this ad will be subject to tax. Place that exact same ad, targeting the same geographical audience with Facebook, and voila! No tax!

This is insult heaped upon an already injured industry.

Newsrooms across the country have had to cut back their operations in the wake of the social media revolution. Two weeks ago, Postmedia announced significant layoffs, including at iconic publications like The Province and Vancouver Sun.

As more people have flocked to social media platforms to get their news, the publications that actually generate the content have struggled to adapt. We have this strange situation now where local news outlets create the content, but Facebook disseminates it and monetizes it.

But wait, there’s more! Many news publishers who used to sell all of their ads via their own local ad departments now rely on Facebook’s ad network. Facebook doesn’t just collect revenue for the ads displayed on their own platform, but they keep their cut of the revenue for ads displayed on the publisher’s own site!

Today more money is being sent to the Silicon Valley media giants and less of it is staying in local communities. This reduction in revenue means we get less local news coverage, less community reporting and fewer local jobs.

So why would we subsidize this any more than we do a cup of coffee?

It’s time to finally stop giving tax breaks to multinational social media giants. Let’s require Facebook, Twitter, Google and the rest to charge the same taxes for their ads as local publishers already do. 

And remember, please tip your local barista.

Oceanside News Parksville Qualicum Beach
Joel Grenz

Joel Grenz

Joel Grenz is a marketing veteran with Motiontide and the publisher of Oceanside News.

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