Branding Taxation

Abstract

Branding is important not only to businesses,but also to the economy. The intellectual property laws and tax laws should thus further the legitimate goals of encouraging and protecting brand investments while maintaining a sound tax base. Intellectual property protections for branding depend on advertisement and enforcement, both of which demand significant amounts of private investment by firms. Although one would expect similar tax treatments of both categories of investment, the categories are actually treated as vastly different for federal income tax purposes. Additionally, tax distinctions also exist within each category. The result is that some branding investments are expensed and others are not. No article has explored in depth these tax distinctions for branding activities. This Article fills that void by evaluating tax rules governing branding within a normative tax policy framework and advancing several proposals where tax distinctions lack theoretical justification.

Keywords: tax, brand, copyright, trademark, intellectual property

JEL Classification: K34, K11