Local Journalism Sustainability Act

I 116TH CONGRESS 2D SESSION H. R. 7640 To provide tax incentives that support local newspapers and other local media, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 16, 2020 Mrs. KIRKPATRICK (for herself, Mr. NEWHOUSE, Mr. FITZPATRICK, Mr. SUOZZI, Mr. WELCH, Mr. RODNEY DAVIS of Illinois, Mr. MCKINLEY, Mr. VISCLOSKY, Mr. PETERSON, Mr. HARDER of California, Mr. HECK, Mr. TAKANO, Mr. CARSON of Indiana, Mr. FLEISCHMANN, Mr. GRIJALVA, Mr. LYNCH, and Mr. WEBER of Texas) 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 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 2 •HR 7640 IH 1986 is amended by inserting after section 25D the fol- 1 lowing new section: 2 ‘‘SEC. 25E. LOCAL NEWSPAPER SUBSCRIPTIONS. 3 ‘‘(a) IN GENERAL.—In the case of an individual, 4 there shall be allowed as a credit against the tax imposed 5 by this chapter for the taxable year an amount equal to 6 the applicable percentage of amounts paid or incurred for 7 subscriptions to one or more local newspapers for the per- 8 sonal use of the taxpayer. 9 ‘‘(b) ANNUAL DOLLAR LIMITATION.—The credit al- 10 lowed under subsection (a) to any taxpayer for any taxable 11 year shall not exceed $250. 12 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 13 this section, the term ‘applicable percentage’ means— 14 ‘‘(1) in the case of the first taxable year to 15 which this section applies, 80 percent, and 16 ‘‘(2) in the case of any subsequent taxable year, 17 50 percent. 18 ‘‘(d) LOCAL NEWSPAPER.—For purposes of this sec- 19 tion— 20 ‘‘(1) IN GENERAL.—The term ‘local newspaper’ 21 means any print or digital publication if— 22 ‘‘(A) the primary content of such publica- 23 tion is news and current events, and 24 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 3 •HR 7640 IH ‘‘(B) at least 51 percent of the readers of 1 such publication (including both print and dig- 2 ital versions) reside in— 3 ‘‘(i) a single State or a single posses- 4 sion of the United States, or 5 ‘‘(ii) a single area with a 200-mile ra- 6 dius. 7 ‘‘(2) CONTINUOUS QUALIFICATION.—The re- 8 quirements of subparagraphs (A) and (B) of para- 9 graph (1) shall not be treated as met unless such re- 10 quirements are met at all times during the period 11 beginning on the date which is 2 years before the 12 date of the enactment of this section and ending on 13 the date that the subscription described in sub- 14 section (a) is paid or incurred. 15 ‘‘(3) APPLICATION TO CERTAIN ORGANIZATIONS 16 EXEMPT FROM TAX.—In the case of any print or 17 digital publication which is published by any organi- 18 zation described in section 501(c) and exempt from 19 tax under section 501(a)— 20 ‘‘(A) such publication shall be treated as a 21 local newspaper only if the publication of print 22 and digital publications is the primary activity 23 of such organization, and 24 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 4 •HR 7640 IH ‘‘(B) any person making a charitable con- 1 tribution (as defined in section 170(c)) to such 2 organization may elect to treat such contribu- 3 tion as an amount paid or incurred for a sub- 4 scription to which this section applies in lieu of 5 treating such contribution as a charitable con- 6 tribution for purposes of section 170. 7 ‘‘(e) TERMINATION.—No credit shall be allowed 8 under this section for any amount paid or incurred in a 9 taxable year ending after the close of 5-year period begin- 10 ning on the date of the enactment of this section.’’. 11 (b) CLERICAL AMENDMENT.—The table of sections 12 for subpart A of part IV of subchapter A of chapter 1 13 is amended by inserting after the item relating to section 14 25D the following new item: 15 ‘‘Sec. 25E. Local newpaper subscriptions.’’. (c) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to amounts paid or incurred in tax- 17 able years ending after the date of the enactment of this 18 Act. 19 SEC. 3. PAYROLL CREDIT FOR COMPENSATION OF JOUR- 20 NALISTS. 21 (a) IN GENERAL.—In the case of an eligible news- 22 paper employer, there shall be allowed as a credit against 23 the taxes imposed by section 3111(a) of the Internal Rev- 24 enue Code of 1986 for each calendar quarter an amount 25 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 5 •HR 7640 IH equal to the applicable percentage of the qualified jour- 1 nalism compensation paid to each individual for such cal- 2 endar quarter. 3 (b) LIMITATIONS AND REFUNDABILITY.— 4 (1) COMPENSATION TAKEN INTO ACCOUNT.— 5 The amount of qualified journalism compensation 6 paid with respect to any individual which may be 7 taken into account under subsection (a) during any 8 calendar quarter by the eligible newspaper employer 9 shall not exceed $12,500. 10 (2) CREDIT LIMITED TO EMPLOYMENT 11 TAXES.—The credit allowed by subsection (a) with 12 respect to any calendar quarter shall not exceed the 13 applicable employment taxes (reduced by any credits 14 allowed under subsections (e) and (f) of section 15 3111 of the Internal Revenue Code of 1986, sections 16 7001 and 7003 of the Families First Coronavirus 17 Response Act, and section 2301 of the CARES Act) 18 on the wages paid with respect to the employment 19 of all the employees of the eligible newspaper em- 20 ployer for such calendar quarter. 21 (3) REFUNDABILITY OF EXCESS CREDIT.— 22 (A) IN GENERAL.—If the amount of the 23 credit under subsection (a) exceeds the limita- 24 tion of paragraph (2) for any calendar quarter, 25 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 6 •HR 7640 IH such excess shall be treated as an overpayment 1 that shall be refunded under sections 6402(a) 2 and 6413(b) of the Internal Revenue Code of 3 1986. 4 (B) TREATMENT OF PAYMENTS.—For pur- 5 poses of section 1324 of title 31, United States 6 Code, any amounts due to the employer under 7 this paragraph shall be treated in the same 8 manner as a refund due from a credit provision 9 referred to in subsection (b)(2) of such section. 10 (c) DEFINITIONS.—For purposes of this section— 11 (1) APPLICABLE PERCENTAGE.—The term ‘‘ap- 12 plicable percentage’’ means— 13 (A) in the case of each of the first 4 cal- 14 endar quarters to which this section applies, 50 15 percent; and 16 (B) in the case of each calendar quarter 17 thereafter, 30 percent. 18 (2) ELIGIBLE NEWSPAPER EMPLOYER.—The 19 term ‘‘eligible newspaper employer’’ means, with re- 20 spect to any calendar quarter, any employer if sub- 21 stantially all of the gross receipts of such employer 22 for such calendar quarter are derived from the trade 23 or business of publishing print or digital publica- 24 tions— 25 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 7 •HR 7640 IH (A) the primary content of which is news 1 and current events; and 2 (B) at least 51 percent of the readers of 3 which reside in— 4 (i) a single State or a single posses- 5 sion of the United States; or 6 (ii) a single area with a 200-mile ra- 7 dius. 8 (3) QUALIFIED JOURNALISM COMPENSATION.— 9 (A) IN GENERAL.—The term ‘‘qualified 10 journalism compensation’’ means— 11 (i) wages paid by an eligible news- 12 paper employer to an employee for service 13 as a journalist; and 14 (ii) in the case of remuneration paid 15 to an individual who is not an employee of 16 the employer, such remuneration as would 17 described in clause (i) if such individual 18 were such an employee. 19 (B) JOURNALIST.—The term ‘‘journalist’’ 20 means any individual who regularly gathers, 21 prepares, collects, photographs, records, writes, 22 edits, reports, or publishes news or information 23 that concerns local, national, or international 24 VerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 8 •HR 7640 IH events or other matters of public interest for 1 dissemination to the public. 2 (4) SECRETARY.—The term ‘‘Secretary’’ means 3 the Secretary of the Treasury or the Secretary’s del- 4 egate. 5 (5) OTHER TERMS.—Any term used in this sec- 6 tion which is also used in chapter 21 of the Internal 7 Revenue Code of 1986 shall have the same meaning 8 as when used in such chapter. 9 (d) AGGREGATION RULE.—All persons treated as a 10 single employer under subsection (a) or (b) of section 52 11 of the Internal Revenue Code of 1986, or subsection (m) 12 or (o) of section 414 of such Code, shall be treated as 13 one employer for purposes of this section. 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 20:20 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 9 •HR 7640 IH newspaper employer for any calendar quarter if such em- 1 ployer elects (at such time and in such manner as the Sec- 2 retary 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 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 10 •HR 7640 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 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 11 •HR 7640 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 the first 20 calendar quarters beginning after the date of 11 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 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640 SSpencer on DSK126QN23PROD with BILLS 12 •HR 7640 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 6 which this section applies, $5,000, and 7 ‘‘(2) in the case of any subsequent taxable year, 8 $2,500. 9 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 10 this section, the term [Text truncated for display. Full text available on Congress.gov.]