What This Bill Does
This bill changes federal tax law to prevent employers from deducting business expenses (getting tax breaks) when they spend money trying to influence their workers' decisions about joining unions or taking collective action. The bill also requires employers and consultants to report these spending activities to the government.
Who It Affects
Employers who spend money on anti-union activities, outside consultants hired to help employers oppose unions, the Internal Revenue Service (the federal tax agency), and workers considering union membership.
Key Provisions
• Employers cannot deduct (subtract from their taxes) any money spent trying to influence workers' opinions about labor organizations or labor organizing activities (Sec. 3(a))
• The law specifically covers spending on union elections, labor disputes, collective bargaining efforts, and related activities that workers have rights to engage in (Sec. 3(b))
• Employers must report detailed information about their anti-union spending to the tax agency, including dates, amounts, and types of activities (Sec. 3(d)(1))
• Third-party consultants hired to conduct anti-union activities must file reports with the tax agency detailing who hired them, dates, amounts, and what activities they performed (Sec. 3(d)(2))
• Employers who fail to report this information face penalties of at least $10,000 or $1,000 per full-time employee, whichever is greater (Sec. 6720D(b))
What Changes
If this law passes, employers lose tax deductions for money spent on activities meant to discourage unions. This includes spending on consultants, company meetings, and campaigns targeting workers' union decisions. Employers must also disclose these expenses to the federal government or face financial penalties.
Important Definitions
• Labor organization: Not specified in bill text (bill references external law)
• Labor organization activity: Includes union elections, labor disputes, collective actions like collective bargaining, and other activities workers have rights to do under labor laws (Sec. 3(b))
• Collective action: Any action including collective bargaining that labor laws protect, such as actions under the National Labor Relations Act or Railway Labor Act (Sec. 3(b))
Effective Date
Amounts paid or spent in tax years beginning 240 days after the date Congress approves this bill (Sec. 3(f))
II
118TH CONGRESS
1ST SESSION
S. 737
To amend the Internal Revenue Code of 1986 to end the tax subsidy for
employer efforts to influence their workers’ exercise of their rights around
labor organizations and engaging in collective action.
IN THE SENATE OF THE UNITED STATES
MARCH 9, 2023
Mr. CASEY (for himself, Mrs. MURRAY, Mr. WYDEN, Mr. VAN HOLLEN, Mr.
BOOKER, Mr. SCHATZ, Ms. SMITH, Mr. REED, Mr. MURPHY, Mr.
WELCH, Mr. DURBIN, Mr. MARKEY, Ms. WARREN, Ms. BALDWIN, Mr.
LUJA´N, Ms. KLOBUCHAR, Mr. MERKLEY, Mr. SANDERS, Mr. WHITE-
HOUSE, Mr. CARDIN, Mr. BROWN, Mr. BLUMENTHAL, Ms. STABENOW,
Mr. PADILLA, Mr. MENENDEZ, Ms. HIRONO, Mr. FETTERMAN, Mr.
PETERS, and Ms. CORTEZ MASTO) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to end the
tax subsidy for employer efforts to influence their work-
ers’ exercise of their rights around labor organizations
and engaging in collective action.
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 ‘‘No Tax Breaks for
4
Union Busting (NTBUB) Act’’.
5
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
2
•S 737 IS
SEC. 2. FINDINGS.
1
Congress makes the following findings:
2
(1) The National Labor Relations Act (29
3
U.S.C. 151 et seq.) declares that it is the right of
4
employees to form, join, or assist labor organiza-
5
tions.
6
(2) The National Labor Relations Act further
7
declares that it is ‘‘the policy of the United States
8
to eliminate the causes of certain substantial ob-
9
structions to the free flow of commerce and to miti-
10
gate and eliminate these obstructions when they
11
have occurred by encouraging the practice and pro-
12
cedure of collective bargaining and by protecting the
13
exercise by workers of full freedom of association,
14
self-organization, and designation of representatives
15
of their own choosing . . .’’.
16
(3) Despite Congress’ intention to give workers
17
full agency in these matters, many employers regu-
18
larly choose to involve themselves, lawfully or unlaw-
19
fully, in the decisions of their employees about
20
whether to avail themselves of their rights under the
21
National Labor Relations Act and the Railway
22
Labor Act (45 U.S.C. 151 et seq.).
23
(4) Employers frequently violate labor laws
24
around organizing and collective action. The Eco-
25
nomic Policy Institute finds that in approximately 4
26
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
3
•S 737 IS
of 10 labor organization elections in 2016-2017 em-
1
ployers were charged with committing an unfair
2
labor practice. Among larger bargaining units of 61
3
employees or more, over 54 percent of elections have
4
an unfair labor practice charge.
5
(5) In practice, these unfair labor practices
6
often include charges such as employees being ille-
7
gally fired for labor organization activity, refusal to
8
bargain in good faith with labor organizations, or co-
9
ercion and intimidation. Employers also frequently
10
use captive audience meetings, workplace surveil-
11
lance, and other lawful or unlawful tactics to sway
12
labor organization elections.
13
(6) Whether or not there are charges of unlaw-
14
ful behavior, employers spend millions of dollars to
15
sway the opinions of their employees with respect to
16
whether or how to exercise their rights under the
17
National Labor Relations Act and the Railway
18
Labor Act. According to the Economic Policy Insti-
19
tute, companies spent $340,000,000 yearly on out-
20
side consultants to sway their workers’ opinions
21
about labor organization activities. This and other
22
spending interfere with the United States’ goal of
23
‘‘encouraging the practice and procedure of collective
24
bargaining’’.
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
4
•S 737 IS
(7) The Internal Revenue Code of 1986 has
1
long recognized that spending by businesses with the
2
purpose of influencing the general public with re-
3
spect to elections, while it may be lawful, is not tax
4
deductible. Congress should extend that principle to
5
spending done by employers to influence workers’
6
elections and collective bargaining decisions. These
7
free choices to exercise the rights to engage in collec-
8
tive bargaining, labor organization representation,
9
and other lawful collective activities should be made
10
without taxpayer subsidies of undue outside influ-
11
ence from employers.
12
SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO IN-
13
FLUENCE EMPLOYEES WITH RESPECT TO
14
LABOR ORGANIZATIONS OR LABOR ORGANI-
15
ZATION ACTIVITIES.
16
(a) IN GENERAL.—Section 162(e)(1) of the Internal
17
Revenue Code of 1986 is amended by striking ‘‘or’’ at the
18
end of subparagraph (C), by striking the period at the end
19
of subparagraph (D) and inserting ‘‘, or’’, and by adding
20
at the end the following new subparagraph:
21
‘‘(E) any attempt to influence the tax-
22
payer’s employees with respect to labor organi-
23
zations or labor organization activities, includ-
24
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
5
•S 737 IS
ing with respect to the opinion of such employ-
1
ees regarding such organizations or activities.’’.
2
(b) LABOR ORGANIZATIONS; LABOR ORGANIZATION
3
ACTIVITIES DEFINED.—Section 162(e) of the Internal
4
Revenue Code of 1986 is amended by redesignating para-
5
graph (6) as paragraph (7) and by inserting after para-
6
graph (5) the following new paragraph:
7
‘‘(6) LABOR ORGANIZATIONS AND LABOR ORGA-
8
NIZATION ACTIVITY DEFINED.—For purposes of this
9
subsection—
10
‘‘(A) LABOR
ORGANIZATION.—The term
11
‘labor organization’ has the meaning given such
12
term in section 3 of the Labor-Management Re-
13
porting and Disclosure Act of 1959 (29 U.S.C.
14
402).
15
‘‘(B) LABOR ORGANIZATION ACTIVITY.—
16
‘‘(i) IN
GENERAL.—The term ‘labor
17
organization activity’ means labor organi-
18
zation elections, labor disputes, collective
19
actions, and such other related activities
20
identified by the Secretary.
21
‘‘(ii) OTHER TERMS.—For purposes of
22
clause (i)—
23
‘‘(I) COLLECTIVE
ACTION.—The
24
term ‘collective action’ means any ac-
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
6
•S 737 IS
tion, including collective bargaining,
1
described in section 7 of the National
2
Labor Relations Act (29 U.S.C. 157)
3
or any action that is a right of em-
4
ployees or labor organizations under
5
the Railway Labor Act (45 U.S.C.
6
151 et seq.).
7
‘‘(II)
LABOR
DISPUTE.—The
8
term ‘labor dispute’ has the meaning
9
given such term under section 3 of the
10
Labor-Management
Reporting
and
11
Disclosure Act of 1959 (29 U.S.C.
12
402).
13
‘‘(III)
LABOR
ORGANIZATION
14
ELECTION.—The term ‘labor organi-
15
zation election’ means any election de-
16
scribed in section 9 of the National
17
Labor Relations Act (29 U.S.C. 159)
18
or section 2 of the Railway Labor Act
19
(45 U.S.C. 152).’’.
20
(c) SPECIAL RULES.—
21
(1) IN GENERAL.—Section 162(e)(4) of the In-
22
ternal Revenue Code of 1986 is amended by adding
23
at the end the following new subparagraph:
24
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
7
•S 737 IS
‘‘(D) EXPENSES RELATING TO LABOR OR-
1
GANIZATIONS OR LABOR ORGANIZATION ACTIVI-
2
TIES.—
3
‘‘(i) IN
GENERAL.—For purposes of
4
paragraph (1)(E), amounts paid or in-
5
curred in connection with attempting to in-
6
fluence the taxpayer’s employees with re-
7
spect to labor organizations or labor orga-
8
nization activities include—
9
‘‘(I) any amount paid or incurred
10
directly or indirectly by the taxpayer,
11
including wages and other general and
12
administrative costs, in connection
13
with an action that results in—
14
‘‘(aa) a complaint issued
15
under section 10 of the National
16
Labor Relations Act (29 U.S.C.
17
160) against the taxpayer for an
18
unfair labor practice under sec-
19
tion 8(a) of such Act (29 U.S.C.
20
158(a)),
21
‘‘(bb) a settlement offer re-
22
lated to an investigation by the
23
National Labor Relations Board
24
of a charge of an unfair labor
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
8
•S 737 IS
practice under section 8(a) of
1
such Act (29 U.S.C. 158(a)) that
2
results in a settlement of such
3
charge without issuance of a
4
complaint under section 10 of
5
such Act (29 U.S.C. 160), or
6
‘‘(cc) a finding of inter-
7
ference, influence, or coercion by
8
a Federal court under section 2
9
of the Railway Labor Act (45
10
U.S.C. 152),
11
‘‘(II) any amount paid or in-
12
curred directly or indirectly by the
13
taxpayer, including wages and other
14
general and administrative costs, in
15
producing, conducting, or attending
16
any meeting or training—
17
‘‘(aa) which includes employ-
18
ees of the taxpayer who are or
19
who could become members of a
20
unit appropriate for the purposes
21
of collective bargaining, and
22
‘‘(bb) at which labor organi-
23
zations or a labor organization
24
activity is discussed, and
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
9
•S 737 IS
‘‘(III) any amount which is re-
1
quired to be reported under the
2
Labor-Management
Reporting
and
3
Disclosure Act of 1959 (29 U.S.C.
4
401 et seq.).
5
‘‘(ii)
EXCEPTIONS.—The
following
6
amounts shall not be treated as amounts
7
paid or incurred in connection with at-
8
tempting to influence the taxpayer’s em-
9
ployees with respect to labor organizations
10
or labor organization activities under para-
11
graph (1)(E):
12
‘‘(I) Amounts paid or incurred
13
for communications or negotiations di-
14
rectly with the designated or selected
15
representative of the employees of the
16
taxpayer described in section 9(a) of
17
the National Labor Relations Act (29
18
U.S.C. 159(a)) or under the Railway
19
Labor Act (45 U.S.C. 151 et seq.).
20
‘‘(II) Amounts paid or incurred
21
for
communications
directly
with
22
shareholders, as may be required
23
under section 13 of the Securities Ex-
24
change Act of 1934 (15 U.S.C. 78m).
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
10
•S 737 IS
‘‘(III) Amounts paid or incurred
1
for communications or consultations
2
by the taxpayer in the process of vol-
3
untarily recognizing a labor organiza-
4
tion as a representative in accordance
5
with section 9 of the National Labor
6
Relations Act (29 U.S.C. 159).
7
‘‘(IV) Amounts paid or incurred
8
with respect to the operation of a
9
labor-management
partnership
de-
10
scribed in a collective bargaining
11
agreement in effect between a rep-
12
resentative of employees of the tax-
13
payer and the taxpayer, including a
14
labor management committee estab-
15
lished pursuant to section 205A(a) of
16
the Labor Management Relations Act,
17
1947 (29 U.S.C. 175a(a)).
18
‘‘(V) Amounts paid or incurred
19
for communications or consultations
20
related to the operation of a grievance
21
procedure described in a collective
22
bargaining agreement in effect be-
23
tween a representative of employees of
24
the taxpayer and the taxpayer.
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
11
•S 737 IS
‘‘(VI) Amounts paid or incurred
1
by a labor organization.
2
‘‘(VII) Amounts paid or incurred
3
for communication materials, includ-
4
ing visual or audio media, required to
5
be posted for, or provided to, employ-
6
ees of the taxpayer by law, including
7
under the National Labor Relations
8
Act (29 U.S.C. 151 et seq.) or the
9
Railway Labor Act (45 U.S.C. 151 et
10
seq.).
11
‘‘(VIII) Amounts paid or in-
12
curred relating to a complaint which
13
is issued by the National Labor Rela-
14
tions Board and which is set aside in
15
full in accordance with subsection (e)
16
or (f) of section 10 of such Act.’’.
17
(2) REGULATORY AUTHORITY.—
18
(A) IN GENERAL.—Section 162(e) of such
19
Code, as amended by subsection (b), is amend-
20
ed by redesignating paragraph (7) as paragraph
21
(8) and by inserting after paragraph (6) the
22
following new paragraph:
23
‘‘(7) REGULATIONS.—The Secretary shall pre-
24
scribe such guidance, rules, or regulations as are
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
12
•S 737 IS
necessary to carry out the purposes of this sub-
1
section, including rules relating to the timing of any
2
deductions in connection with amounts described in
3
paragraph (4)(D)(ii)(VIII).’’.
4
(B) TIMING.—Not later than the date that
5
is 240 days after the date of the enactment of
6
this Act, the Secretary of the Treasury (or the
7
Secretary’s delegate) shall prescribe guidance,
8
rules, or regulations with respect to the applica-
9
tion of the amendments made by this Act.
10
(d) INFORMATION REPORTING.—
11
(1) CERTAIN INFORMATION INCLUDED IN TAX
12
RETURNS.—
13
(A) IN GENERAL.—Part I of subchapter B
14
of chapter 68 is amended by adding at the end
15
the following new section:
16
‘‘SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION
17
WITH RESPECT TO EMPLOYER ACTIVITIES
18
RELATING TO LABOR ORGANIZATIONS.
19
‘‘(a) IN GENERAL.—If any taxpayer who makes ex-
20
penditures described in section 162(e)(1)(E) fails to pro-
21
vide with the return of tax for the taxable year to which
22
such expenditures relate the information provided in sub-
23
section (c) with respect to such expenditures, or who fails
24
to provide all of the information required under subsection
25
VerDate Sep 11 2014
01:10 Mar 18, 2023
Jkt 039200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\S737.IS
S737
kjohnson on DSK79L0C42PROD with BILLS
13
•S 737 IS
(b) or fails to provide correct information, shall pay a pen-
1
alty in the amount determined under subsection (b).
2
‘‘(b) DETERMINATION OF PENALTY AMOUNT.—
3
‘‘(1) IN GENERAL.—The amount of the penalty
4
under this section for any fa
[Text truncated for display. Full text available on Congress.gov.]