[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3940 Introduced in House (IH)]
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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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Local Journalism Sustainability
Act''.
SEC. 2. CREDIT FOR LOCAL NEWSPAPER SUBSCRIPTIONS.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 25D the following new section:
``SEC. 25E. LOCAL NEWSPAPER SUBSCRIPTIONS.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year an amount equal to the applicable percentage of amounts
paid or incurred for subscriptions to one or more local newspapers for
the personal use of the taxpayer.
``(b) Annual Dollar Limitation.--The credit allowed under
subsection (a) to any taxpayer for any taxable year shall not exceed
$250.
``(c) Applicable Percentage.--For purposes of this section, the
term `applicable percentage' means--
``(1) in the case of the first taxable year to which this
section applies, 80 percent, and
``(2) in the case of any subsequent taxable year, 50
percent.
``(d) Local Newspaper.--For purposes of this section--
``(1) In general.--The term `local newspaper' means any
print or digital publication if--
``(A) the primary content of such publication is
original content derived from primary sources and
relating to news and current events,
``(B) such publication primarily serves the needs
of a regional or local community,
``(C) the publisher of such publication employs at
least one local news journalist who resides in such
regional or local community, and
``(D) the publisher of such publication employs not
greater than 750 employees.
``(2) Local news journalist.--For purposes of paragraph
(1)(C), the term `local news journalist' means any individual
who regularly gathers, collects, photographs, records, writes,
or reports news or information that concerns local events or
other matters of local public interest.
``(3) Aggregation rule.--
``(A) In general.--For purposes of subparagraphs
(C) and (D) of paragraph (1), all persons treated as a
single employer under subsection (a) or (b) of section
52, or subsection (m) or (o) of section 414, shall be
treated as one person.
``(B) Exception.--Subparagraph (A) shall not apply
unless such persons are involved in the production of
the same print or digital publication.
``(4) Continuous qualification.--The requirements of
subparagraphs (A) and (B) of paragraph (1) shall not be treated
as met unless such requirements are met at all times during the
period beginning on the date which is 2 years before the date
of the enactment of this section and ending on the date that
the subscription described in subsection (a) is paid or
incurred.
``(5) Application to certain organizations exempt from
tax.--In the case of any print or digital publication which is
published by any organization described in section 501(c) and
exempt from tax under section 501(a)--
``(A) such publication shall be treated as a local
newspaper only if the publication of print and digital
publications is the primary activity of such
organization, and
``(B) any person making a charitable contribution
(as defined in section 170(c)) to such organization may
elect to treat such contribution as an amount paid or
incurred for a subscription to which this section
applies in lieu of treating such contribution as a
charitable contribution for purposes of section 170.
``(e) Termination.--No credit shall be allowed under this section
for any amount paid or incurred in a taxable year ending after the
close of 5-year period beginning on the date of the enactment of this
section.''.
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 is amended by inserting after the
item relating to section 25D the following new item:
``Sec. 25E. Local newpaper subscriptions.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
SEC. 3. PAYROLL CREDIT FOR COMPENSATION OF LOCAL NEWS JOURNALISTS.
(a) In General.--In the case of an eligible local newspaper
publisher, there shall be allowed as a credit against the taxes imposed
by section 3111(a) of the Internal Revenue Code of 1986 for each
calendar quarter an amount equal to the applicable percentage of wages
paid by such publisher to local news journalists for such calendar
quarter.
(b) Limitations and Refundability.--
(1) Wages taken into account.--The amount of wages paid
with respect to any individual which may be taken into account
under subsection (a) during any calendar quarter by the
eligible local newspaper publisher shall not exceed $12,500.
(2) Credit limited to employment taxes.--The credit allowed
by subsection (a) with respect to any calendar quarter shall
not exceed the applicable employment taxes (reduced by any
credits allowed under subsections (e) and (f) of section 3111
of the Internal Revenue Code of 1986, sections 7001 and 7003 of
the Families First Coronavirus Response Act, and section 2301
of the CARES Act) on the wages paid with respect to the
employment of all the employees of the eligible local newspaper
publisher for such calendar quarter.
(3) Refundability of excess credit.--
(A) In general.--If the amount of the credit under
subsection (a) exceeds the limitation of paragraph (2)
for any calendar quarter, such excess shall be treated
as an overpayment that shall be refunded under sections
6402(a) and 6413(b) of the Internal Revenue Code of
1986.
(B) Treatment of payments.--For purposes of section
1324 of title 31, United States Code, any amounts due
to the employer under this paragraph shall be treated
in the same manner as a refund due from a credit
provision referred to in subsection (b)(2) of such
section.
(c) Definitions.--For purposes of this section--
(1) Applicable percentage.--The term ``applicable
percentage'' means--
(A) in the case of each of the first 4 calendar
quarters to which this section applies, 50 percent; and
(B) in the case of each calendar quarter
thereafter, 30 percent.
(2) Eligible local newspaper publisher.--The term
``eligible local newspaper publisher'' means, with respect to
any calendar quarter, any employer if substantially all of the
gross receipts of such employer for such calendar quarter are
derived in the trade or business of publishing local newspapers
(as defined in section 25E(d)(1)).
(3) Local news journalist.--The term ``local news
journalist'' means, with respect to any eligible local
newspaper publisher for any calendar quarter, any individual
who provides at least 100 hours of service as a local news
journalist (as defined in section 25E(d)(2)) during such
calendar quarter to such eligible local newspaper publisher.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(5) Other terms.--Any term used in this section which is
also used in chapter 21 of the Internal Revenue Code of 1986
shall have the same meaning as when used in such chapter.
(d) Aggregation Rule.--
(1) In general.--All persons treated as a single employer
under subsection (a) or (b) of section 52 of the Internal
Revenue Code of 1986, or subsection (m) or (o) of section 414
of such Code, shall be treated as one employer for purposes of
this section.
(2) Exception.--Paragraph (1) shall not apply unless such
persons are involved in the production of the same print or
digital publication.
(e) Certain Rules To Apply.--For purposes of this section, rules
similar to the rules of sections 51(i)(1) and 280C(a) of the Internal
Revenue Code of 1986 shall apply.
(f) Certain Governmental Employers.--This credit shall not apply to
the Government of the United States, the government of any State or
political subdivision thereof, or any agency or instrumentality of any
of the foregoing.
(g) Election To Have Section Not Apply.--This section shall not
apply with respect to any eligible local newspaper publisher for any
calendar quarter if such person elects (at such time and in such manner
as the Secretary may prescribe) not to have this section apply.
(h) Special Rules.--
(1) Employee not taken into account more than once.--An
employee shall not be included for purposes of this section for
any period with respect to any employer if such employer is
allowed a credit under section 51 of the Internal Revenue Code
of 1986 with respect to such employee for such period.
(2) Denial of double benefit.--Any wages taken into account
in determining the credit allowed under this section shall not
be taken into account for purposes of determining the credit
allowed under section 45S of such Code.
(3) Third-party payors.--Any credit allowed under this
section shall be treated as a credit described in section
3511(d)(2) of such Code.
(i) Transfers to Federal Old-Age and Survivors Insurance Trust
Fund.--There are hereby appropriated to the Federal Old-Age and
Survivors Insurance Trust Fund and the Federal Disability Insurance
Trust Fund established under section 201 of the Social Security Act (42
U.S.C. 401) amounts equal to the reduction in revenues to the Treasury
by reason of this section (without regard to this subsection). Amounts
appropriated by the preceding sentence shall be transferred from the
general fund at such times and in such manner as to replicate to the
extent possible the transfers which would have occurred to such Trust
Fund or Account had this section not been enacted.
(j) Treatment of Deposits.--The Secretary shall waive any penalty
under section 6656 of the Internal Revenue Code of 1986 for any failure
to make a deposit of any applicable employment taxes if the Secretary
determines that such failure was due to the reasonable anticipation of
the credit allowed under this section.
(k) Regulations and Guidance.--The Secretary shall issue such
forms, instructions, regulations, and guidance as are necessary--
(1) to allow the advance payment of the credit under
subsection (a), subject to the limitations provided in this
section, based on such information as the Secretary shall
require;
(2) to provide for the reconciliation of such advance
payment with the amount advanced at the time of filing the
return of tax for the applicable calendar quarter or taxable
year; and
(3) with respect to the application of the credit under
subsection (a) to third-party payors (including professional
employer organizations, certified professional employer
organizations, or agents under section 3504 of the Internal
Revenue Code of 1986), including regulations or guidance
allowing such payors to submit documentation necessary to
substantiate the eligible employer status of employers that use
such payors.
(l) Application.--This section shall only apply to calendar
quarters during the first 5 calendar years beginning after the date of
the enactment of this Act.
SEC. 4. CREDIT FOR ADVERTISING IN LOCAL NEWSPAPERS AND LOCAL MEDIA.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 45U. ADVERTISING IN LOCAL NEWSPAPERS AND LOCAL MEDIA.
``(a) In General.--For purposes of section 38, in the case of any
eligible small business, the local media advertising credit determined
under this section for any taxable year is an amount equal to the
applicable percentage of the qualified local media advertising expenses
paid or incurred by the taxpayer during such taxable year.
``(b) Limitation.--The credit allowed under subsection (a) to any
taxpayer for any taxable year shall not exceed--
``(1) in the case of the first taxable year to which this
section applies, $5,000, and
``(2) in the case of any subsequent taxable year, $2,500.
``(c) Applicable Percentage.--For purposes of this section, the
term `applicable percentage' means--
``(1) in the case of the first taxable year to which this
section applies, 80 percent, and
``(2) in the case of any subsequent taxable year, 50
percent.
``(d) Eligible Small Business.--For purposes of this section, the
term `eligible small business' means any person for any taxable year if
the average number of full-time employees (as determined for purposes
of determining whether an employer is an applicable large employer for
purposes of section 4980H(c)(2) of the Internal Revenue Code of 1986)
employed by such person during such taxable year was less than 50.
``(e) Qualified Local Media Advertising Expenses.--For purposes of
this section--
``(1) In general.--The term `qualified local media
advertising expenses' means amounts paid or incurred in the
ordinary course of a trade or business for advertising in a
local newspaper (as defined in section 25E(d)) or a broadcast
of a local radio or television station.
``(2) Local radio or television station.--The term `local
radio or television station' means any broadcast radio or
television station licensed by the Federal Communications
Commission to serve a local community.
``(f) Special Rules.--
``(1) Denial of double benefit.--No deduction shall be
allowed for any qualified local media advertising expenses
otherwise allowable as a deduction for the taxable year which
is equal to the amount of the credit determined for such
taxable year under subsection (a).
``(2) Aggregation rule.--All persons treated as a single
employer under subsection (a) or (b) of section 52 of the
Internal Revenue Code of 1986, or subsection (m) or (o) of
section 414 of such Code, shall be treated as one employer for
purposes of this section.
``(g) Termination.--No credit shall be allowed under this section
for any amount paid or incurred in a taxable year ending after the
close of 5-year period beginning on the date of the enactment of this
section.''.
(b) Credit Allowed as Part of General Business Credit.--Section
38(b), as amended by the preceding provisions of this Act, is further
amended by striking ``plus'' at the end of paragraph (32), by striking
the period at the end of paragraph (33) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(34) in the case of an eligible small business, the local
media advertising credit determined under section 45U(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:
``Sec. 45U. Advertising in local newspapers and local media.''.
(d) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
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