Pittsburgh City Council is looking in the wrong direction by trying to increase revenue by creating a new tax on billboards.
For the second time in less than a year, council has put forward the idea of imposing a 10 percent tax on the purchase or rental of billboard space. Council members estimate it would generate $2 million to $4 million a year.
The tax would be collected by billboard companies at the time that advertisers pay them. This excise tax would be in addition to property taxes that billboard owners already pay on the land where their signs sit, and in addition to other business taxes that apply to the firms.
Council President Darlene Harris and member Natalia Rudiak picked up on the idea that was advanced late last year by former member Doug Shields. Philadelphia charges a similar tax, of 7 percent, on billboards in that city, and Pittsburgh has been told by state overseers to find new forms of revenue.
The reasoning on the billboards is that they take up little space on the ground -- and that's what is subject to property taxes -- but the space on the poles is a lot more valuable. In some states, billboards are taxed on the income they generate, but that's not permitted under Pennsylvania law.
Lamar Advertising, the only billboard company doing business in the city, pays more than $100,000 in property taxes, but city officials believe the firm should pay a lot more. In addition, the firm pays a $52 annual permitting fee for each of its signs.
That's one of two tactics that council can employ going forward. First, it could lobby lawmakers to change the way the billboards are subject to taxation in Pennsylvania. Second, and this council could do on its own, would be to raise the price of the annual billboard permits.
A bigger billboard fee may not be as lucrative as what council is proposing, but it's better than singling out one industry for a new tax.