Updated: Calif. City Considers Outdoor Tax

For now, proponents of slapping a 7 percent excise tax on outdoor ad advertising in West Hollywood, Calif., home of the iconic Sunset Strip, will have to wait. The West Hollywood City Council voted late Monday (Nov. 15) to not include the Tax Billboard Act on the March ballot.

Proponents argued that the Act could bring in more than $4 million annually in revenue for the financially starved City, cutting into the revenue of big outdoor companies such as Clear Channel Outdoor and CBS Outdoor.

A similar ballot initiative in Los Angeles failed to make it on the March 2011 ballot. The Los Angeles billboard tax proposed was 12 percent and would generate $24 million in annual revenue for the City.

Both tax initiatives faced an uphill climb. While the proponents of the West Hollywood billboard tax (under the banner Sunset Strip, Inc.) point to a survey the group conducted showing 86 percent of voters support the tax, the West Hollywood City Council did not support the measure. In a report to the City, The City’s attorney shot it down, citing, among other objections, it would violate constitutional protection of speech by singling out one form of speech for disparate tax treatment.

Even more problematic than the legal hurdles was a provision in the act that would allow outdoor companies such as SkyTag (a member of Sunset Strip, Inc.) to install wall scapes without going through an approval and permitting process.

“It also appears that the initiative contains Trojan Horse–type language that would allow some building owners automatic rights to install tall walls and other signage that they currently cannot install without going through an approval and permitting process. It would basically allow unregulated placement of billboards and tall walls on some of the City’s main thorough-fares without any local control of authority,” read a voter advisory issued by City Council member Jeffrey Prang.