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Proposed digital ads tax would devastate small businesses like mine


Proposed digital ads tax would devastate small businesses like mine

Apr 09, 2024 | 4:00 am ET
By Abby Jordan
Proposed digital ads tax would devastate small businesses like mine
The eCreamery ice cream parlor in the Dundee neighborhood of Omaha. (Courtesy of eCreamery)

Eighteen years ago, my friend and I started a business selling handmade, custom-churned ice cream. Our one-of-a-kind flavors – like red velvet cake and maple blonde brownie – have made our old-fashioned parlor a longtime favorite in Omaha.

But our biggest success has been selling our ice cream online. We market our ice cream as a special-occasion gift that people anywhere in the United States can order from our website and personalize with their own special messages and packaging designs. We ship more than 400,000 personalized ice-cream pints a year – a figure that’s doubled over the past 10 years. In fact, 90% of our revenues come from online sales. Most people don’t know it, but it’s our online business that keeps our neighborhood shop doors open.

Most people – including many Nebraska lawmakers – also don’t know that affordable digital ads are as critical to our online business as fresh milk is to our ice cream. That’s why I’m extremely worried by our state’s proposed tax on digital ads, which would make them far more expensive and hurt our bottom line. And that would make it much harder for us to grow our business, retain our fantastic employees and keep our brick-and-mortar store open.

We’re already facing dramatically inflated shipping and ingredient costs, including record-high cocoa prices. The last thing we need is a tax on another essential part of our business.

Honestly, the proposed tax could hardly come at a worse time, because federal lawmakers are already advocating legislation like the AMERICA Act that would make digital advertising more expensive and less effective – a double whammy for small specialty businesses like ours.

Lawmakers seem to think new digital advertising taxes and laws will deal a blow to big companies like Google and Facebook. They don’t understand that it’s small local businesses like ours – which rely on affordable, effective digital ads – that will actually take the hit.

We don’t have the budget for pricey national TV or radio ads. We know we can reach people online, though, because that’s where folks do almost all their “errands.” But unlike dominant, deep-pocketed players like Breyers or Ben & Jerry’s, we can’t afford to show our ads to everyone online. We need to reach people interested in sending a gift for a special occasion like an anniversary or graduation, or who love specialty gourmet ice cream.

Working with platforms like Facebook, Google, and Instagram helps us do exactly that, even on a tight small-business budget. Those companies offer world-class data analytics and ad technologies that allow us to advertise our products to the right audience.

Our digital ad partners can even measure the effectiveness of our advertising, so if certain ads aren’t working, we can stop running them and put our money into others that are more successful. That helps us make the most sales with the fewest ad dollars, which increases our revenues, minimizes our marketing costs and boosts our bottom line. And that, in turn, means more time and money for improving our recipes, hiring people and growing our business.

Affordable digital ads are vital to thousands of small businesses like ours, and they’re currently under extreme pressure from legislators across the country. A state tax on digital ads would be an additional serious blow to small Nebraska businesses like mine, making it far harder for us to succeed and compete with big established players. I urge legislators to recognize the detrimental impact the proposed digital ads tax will have on small businesses across Nebraska, and to say “no” to a tax on digital ads.