Local Journalism Sustainability Act

I 117TH CONGRESS 1ST SESSION H. R. 3940 To provide tax incentives that support local newspapers and other local media, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 16, 2021 Mrs. KIRKPATRICK (for herself and Mr. NEWHOUSE) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide tax incentives that support local newspapers and other local media, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Local Journalism Sus- 4 tainability Act’’. 5 SEC. 2. CREDIT FOR LOCAL NEWSPAPER SUBSCRIPTIONS. 6 (a) IN GENERAL.—Subpart A of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 1986 is amended by inserting after section 25D the fol- 9 lowing new section: 10 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 2 •HR 3940 IH ‘‘SEC. 25E. LOCAL NEWSPAPER SUBSCRIPTIONS. 1 ‘‘(a) IN GENERAL.—In the case of an individual, 2 there shall be allowed as a credit against the tax imposed 3 by this chapter for the taxable year an amount equal to 4 the applicable percentage of amounts paid or incurred for 5 subscriptions to one or more local newspapers for the per- 6 sonal use of the taxpayer. 7 ‘‘(b) ANNUAL DOLLAR LIMITATION.—The credit al- 8 lowed under subsection (a) to any taxpayer for any taxable 9 year shall not exceed $250. 10 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 11 this section, the term ‘applicable percentage’ means— 12 ‘‘(1) in the case of the first taxable year to 13 which this section applies, 80 percent, and 14 ‘‘(2) in the case of any subsequent taxable year, 15 50 percent. 16 ‘‘(d) LOCAL NEWSPAPER.—For purposes of this sec- 17 tion— 18 ‘‘(1) IN GENERAL.—The term ‘local newspaper’ 19 means any print or digital publication if— 20 ‘‘(A) the primary content of such publica- 21 tion is original content derived from primary 22 sources and relating to news and current 23 events, 24 ‘‘(B) such publication primarily serves the 25 needs of a regional or local community, 26 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 3 •HR 3940 IH ‘‘(C) the publisher of such publication em- 1 ploys at least one local news journalist who re- 2 sides in such regional or local community, and 3 ‘‘(D) the publisher of such publication em- 4 ploys not greater than 750 employees. 5 ‘‘(2) LOCAL NEWS JOURNALIST.—For purposes 6 of paragraph (1)(C), the term ‘local news journalist’ 7 means any individual who regularly gathers, collects, 8 photographs, records, writes, or reports news or in- 9 formation that concerns local events or other mat- 10 ters of local public interest. 11 ‘‘(3) AGGREGATION RULE.— 12 ‘‘(A) IN GENERAL.—For purposes of sub- 13 paragraphs (C) and (D) of paragraph (1), all 14 persons treated as a single employer under sub- 15 section (a) or (b) of section 52, or subsection 16 (m) or (o) of section 414, shall be treated as 17 one person. 18 ‘‘(B) EXCEPTION.—Subparagraph (A) 19 shall not apply unless such persons are involved 20 in the production of the same print or digital 21 publication. 22 ‘‘(4) CONTINUOUS QUALIFICATION.—The re- 23 quirements of subparagraphs (A) and (B) of para- 24 graph (1) shall not be treated as met unless such re- 25 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 4 •HR 3940 IH quirements are met at all times during the period 1 beginning on the date which is 2 years before the 2 date of the enactment of this section and ending on 3 the date that the subscription described in sub- 4 section (a) is paid or incurred. 5 ‘‘(5) APPLICATION TO CERTAIN ORGANIZATIONS 6 EXEMPT FROM TAX.—In the case of any print or 7 digital publication which is published by any organi- 8 zation described in section 501(c) and exempt from 9 tax under section 501(a)— 10 ‘‘(A) such publication shall be treated as a 11 local newspaper only if the publication of print 12 and digital publications is the primary activity 13 of such organization, and 14 ‘‘(B) any person making a charitable con- 15 tribution (as defined in section 170(c)) to such 16 organization may elect to treat such contribu- 17 tion as an amount paid or incurred for a sub- 18 scription to which this section applies in lieu of 19 treating such contribution as a charitable con- 20 tribution for purposes of section 170. 21 ‘‘(e) TERMINATION.—No credit shall be allowed 22 under this section for any amount paid or incurred in a 23 taxable year ending after the close of 5-year period begin- 24 ning on the date of the enactment of this section.’’. 25 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 5 •HR 3940 IH (b) CLERICAL AMENDMENT.—The table of sections 1 for subpart A of part IV of subchapter A of chapter 1 2 is amended by inserting after the item relating to section 3 25D the following new item: 4 ‘‘Sec. 25E. Local newpaper subscriptions.’’. (c) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to amounts paid or incurred in tax- 6 able years beginning after the date of the enactment of 7 this Act. 8 SEC. 3. PAYROLL CREDIT FOR COMPENSATION OF LOCAL 9 NEWS JOURNALISTS. 10 (a) IN GENERAL.—In the case of an eligible local 11 newspaper publisher, there shall be allowed as a credit 12 against the taxes imposed by section 3111(a) of the Inter- 13 nal Revenue Code of 1986 for each calendar quarter an 14 amount equal to the applicable percentage of wages paid 15 by such publisher to local news journalists for such cal- 16 endar quarter. 17 (b) LIMITATIONS AND REFUNDABILITY.— 18 (1) WAGES TAKEN INTO ACCOUNT.—The 19 amount of wages paid with respect to any individual 20 which may be taken into account under subsection 21 (a) during any calendar quarter by the eligible local 22 newspaper publisher shall not exceed $12,500. 23 (2) CREDIT LIMITED TO EMPLOYMENT 24 TAXES.—The credit allowed by subsection (a) with 25 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 6 •HR 3940 IH respect to any calendar quarter shall not exceed the 1 applicable employment taxes (reduced by any credits 2 allowed under subsections (e) and (f) of section 3 3111 of the Internal Revenue Code of 1986, sections 4 7001 and 7003 of the Families First Coronavirus 5 Response Act, and section 2301 of the CARES Act) 6 on the wages paid with respect to the employment 7 of all the employees of the eligible local newspaper 8 publisher for such calendar quarter. 9 (3) REFUNDABILITY OF EXCESS CREDIT.— 10 (A) IN GENERAL.—If the amount of the 11 credit under subsection (a) exceeds the limita- 12 tion of paragraph (2) for any calendar quarter, 13 such excess shall be treated as an overpayment 14 that shall be refunded under sections 6402(a) 15 and 6413(b) of the Internal Revenue Code of 16 1986. 17 (B) TREATMENT OF PAYMENTS.—For pur- 18 poses of section 1324 of title 31, United States 19 Code, any amounts due to the employer under 20 this paragraph shall be treated in the same 21 manner as a refund due from a credit provision 22 referred to in subsection (b)(2) of such section. 23 (c) DEFINITIONS.—For purposes of this section— 24 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 7 •HR 3940 IH (1) APPLICABLE PERCENTAGE.—The term ‘‘ap- 1 plicable percentage’’ means— 2 (A) in the case of each of the first 4 cal- 3 endar quarters to which this section applies, 50 4 percent; and 5 (B) in the case of each calendar quarter 6 thereafter, 30 percent. 7 (2) ELIGIBLE LOCAL NEWSPAPER PUB- 8 LISHER.—The term ‘‘eligible local newspaper pub- 9 lisher’’ means, with respect to any calendar quarter, 10 any employer if substantially all of the gross receipts 11 of such employer for such calendar quarter are de- 12 rived in the trade or business of publishing local 13 newspapers (as defined in section 25E(d)(1)). 14 (3) LOCAL NEWS JOURNALIST.—The term 15 ‘‘local news journalist’’ means, with respect to any 16 eligible local newspaper publisher for any calendar 17 quarter, any individual who provides at least 100 18 hours of service as a local news journalist (as de- 19 fined in section 25E(d)(2)) during such calendar 20 quarter to such eligible local newspaper publisher. 21 (4) SECRETARY.—The term ‘‘Secretary’’ means 22 the Secretary of the Treasury or the Secretary’s del- 23 egate. 24 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 8 •HR 3940 IH (5) OTHER TERMS.—Any term used in this sec- 1 tion which is also used in chapter 21 of the Internal 2 Revenue Code of 1986 shall have the same meaning 3 as when used in such chapter. 4 (d) AGGREGATION RULE.— 5 (1) IN GENERAL.—All persons treated as a sin- 6 gle employer under subsection (a) or (b) of section 7 52 of the Internal Revenue Code of 1986, or sub- 8 section (m) or (o) of section 414 of such Code, shall 9 be treated as one employer for purposes of this sec- 10 tion. 11 (2) EXCEPTION.—Paragraph (1) shall not 12 apply unless such persons are involved in the pro- 13 duction of the same print or digital publication. 14 (e) CERTAIN RULES TO APPLY.—For purposes of 15 this section, rules similar to the rules of sections 51(i)(1) 16 and 280C(a) of the Internal Revenue Code of 1986 shall 17 apply. 18 (f) CERTAIN GOVERNMENTAL EMPLOYERS.—This 19 credit shall not apply to the Government of the United 20 States, the government of any State or political subdivi- 21 sion thereof, or any agency or instrumentality of any of 22 the foregoing. 23 (g) ELECTION TO HAVE SECTION NOT APPLY.— 24 This section shall not apply with respect to any eligible 25 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 9 •HR 3940 IH local newspaper publisher for any calendar quarter if such 1 person elects (at such time and in such manner as the 2 Secretary may prescribe) not to have this section apply. 3 (h) SPECIAL RULES.— 4 (1) EMPLOYEE NOT TAKEN INTO ACCOUNT 5 MORE THAN ONCE.—An employee shall not be in- 6 cluded for purposes of this section for any period 7 with respect to any employer if such employer is al- 8 lowed a credit under section 51 of the Internal Rev- 9 enue Code of 1986 with respect to such employee for 10 such period. 11 (2) DENIAL OF DOUBLE BENEFIT.—Any wages 12 taken into account in determining the credit allowed 13 under this section shall not be taken into account for 14 purposes of determining the credit allowed under 15 section 45S of such Code. 16 (3) THIRD-PARTY PAYORS.—Any credit allowed 17 under this section shall be treated as a credit de- 18 scribed in section 3511(d)(2) of such Code. 19 (i) TRANSFERS TO FEDERAL OLD-AGE AND SUR- 20 VIVORS INSURANCE TRUST FUND.—There are hereby ap- 21 propriated to the Federal Old-Age and Survivors Insur- 22 ance Trust Fund and the Federal Disability Insurance 23 Trust Fund established under section 201 of the Social 24 Security Act (42 U.S.C. 401) amounts equal to the reduc- 25 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 10 •HR 3940 IH tion in revenues to the Treasury by reason of this section 1 (without regard to this subsection). Amounts appropriated 2 by the preceding sentence shall be transferred from the 3 general fund at such times and in such manner as to rep- 4 licate to the extent possible the transfers which would have 5 occurred to such Trust Fund or Account had this section 6 not been enacted. 7 (j) TREATMENT OF DEPOSITS.—The Secretary shall 8 waive any penalty under section 6656 of the Internal Rev- 9 enue Code of 1986 for any failure to make a deposit of 10 any applicable employment taxes if the Secretary deter- 11 mines that such failure was due to the reasonable anticipa- 12 tion of the credit allowed under this section. 13 (k) REGULATIONS AND GUIDANCE.—The Secretary 14 shall issue such forms, instructions, regulations, and guid- 15 ance as are necessary— 16 (1) to allow the advance payment of the credit 17 under subsection (a), subject to the limitations pro- 18 vided in this section, based on such information as 19 the Secretary shall require; 20 (2) to provide for the reconciliation of such ad- 21 vance payment with the amount advanced at the 22 time of filing the return of tax for the applicable cal- 23 endar quarter or taxable year; and 24 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 11 •HR 3940 IH (3) with respect to the application of the credit 1 under subsection (a) to third-party payors (including 2 professional employer organizations, certified profes- 3 sional employer organizations, or agents under sec- 4 tion 3504 of the Internal Revenue Code of 1986), 5 including regulations or guidance allowing such 6 payors to submit documentation necessary to sub- 7 stantiate the eligible employer status of employers 8 that use such payors. 9 (l) APPLICATION.—This section shall only apply to 10 calendar quarters during the first 5 calendar years begin- 11 ning after the date of the enactment of this Act. 12 SEC. 4. CREDIT FOR ADVERTISING IN LOCAL NEWSPAPERS 13 AND LOCAL MEDIA. 14 (a) IN GENERAL.—Subpart D of part IV of sub- 15 chapter A of chapter 1 of the Internal Revenue Code of 16 1986 is amended by adding at the end the following new 17 section: 18 ‘‘SEC. 45U. ADVERTISING IN LOCAL NEWSPAPERS AND 19 LOCAL MEDIA. 20 ‘‘(a) IN GENERAL.—For purposes of section 38, in 21 the case of any eligible small business, the local media ad- 22 vertising credit determined under this section for any tax- 23 able year is an amount equal to the applicable percentage 24 VerDate Sep 11 2014 23:01 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3940.IH H3940 TKELLEY on DSK125TN23PROD with BILLS 12 •HR 3940 IH of the qualified local media advertising expenses paid or 1 incurred by the taxpayer during such taxable year. 2 ‘‘(b) LIMITATION.—The credit allowed under sub- 3 section (a) to any taxpayer for any taxable year shall not 4 exceed— 5 ‘‘(1) in the case of the first taxable year to [Text truncated for display. Full text available on Congress.gov.]