United States Advertising in Foreign Broadcasting Industries Message to the Congress on Proposed Legislation.
To the Congress of the United States
I have determined that the provision of Canadian tax law which denies a deduction for the cost of advertising placed with a foreign broadcaster and directed primarily at the Canadian market is an unreasonable practice which burdens U.S. commerce within the meaning of section 301 (a) (2) (B) of the Trade Act of 1974 ( 19 U.S.C. 2411 ). The Canadian law was intended to strengthen the Canadian broadcast industry as an aspect of Canadian culture. However, the law places the cost of attaining its objectives on U.S. companies and thus unreasonably and unnecessarily burdens U.S. commerce. It is estimated that U.S. broadcasters have lost access to more than $20 million in advertising revenues annually as a result of this law.
Therefore, I am proposing legislation which would amend the Internal Revenue Code to deny a deduction, otherwise allowable under the Code, for expenses of an advertisement placed with a foreign broadcast station and directed primarily to a market in the United States if a similar deduction is denied to advertisers, in the country in which such station is located, for the costs of advertising directed primarily to a market in that country when placed with a U.S. broadcast station. The effective date of the proposed amendment would be for taxable years beginning after December 31, 1981.
This legislation will establish a disincentive for the transfer of U.S. advertising revenues to foreign broadcasters only if the laws of the country in which such broadcasters are located create a similar disincentive vis-a-vis U.S. broadcasters. Thus, if Canada should repeal its law, this amendment will cease to apply to Canada.
I urge the early passage of this legislation.
The White House,
September 9, 1980.
Jimmy Carter, United States Advertising in Foreign Broadcasting Industries Message to the Congress on Proposed Legislation. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/250770