Community News and Small Business Support

Summary#

This bill creates two temporary tax credits to support local news and encourage small businesses to advertise in local media.

  1. An advertising credit for eligible small businesses (fewer than 50 full-time employees). The credit covers a share of "qualified local media advertising expenses" for advertising in local newspapers or on FCC-licensed local radio or television stations. "Advertising" also includes sponsorships. For the first taxable year the credit applies, the credit is 80% of qualified expenses but cannot exceed $5,000. For later taxable years, the credit is 50% of qualified expenses but cannot exceed $2,500. The bill defines what counts as a "local newspaper" and limits publishers (for example, a publisher must employ at least one full-time local news journalist, have no more than 750 employees, and meet other ownership and funding tests). The advertising credit disallows a tax deduction for the same expenses and applies to taxable years beginning after enactment. The advertising credit expires five years after enactment.

  2. A payroll credit for employers of local news journalists. Eligible employers are those whose gross receipts come substantially from publishing local newspapers (as defined by the advertising credit). For each calendar quarter, the employer may claim a credit equal to an applicable percentage of wages paid to workers who qualify as "local news journalists" (those who work at least 200 hours as defined). The applicable percentage is 50% for each of the first four calendar quarters the credit applies and 30% for later quarters. Limits include: up to 1,500 employees counted per employer per quarter; up to $12,500 of wages per individual per quarter may be counted; the credit cannot exceed the employer's applicable employment taxes for the quarter (with excess treated as a refundable overpayment). The payroll credit excludes federal, state, or local governments as employers, allows an employer to opt out, and contains rules to prevent double counting with other tax credits. The payroll credit applies to calendar quarters beginning after enactment and expires five years after enactment.

Both credits include aggregation rules for related employers and require regulations and guidance for administration.

What it means for you#

  • Small businesses with fewer than 50 full-time employees can get a tax credit when they pay for advertising in qualifying local newspapers or on local radio or TV. The first year gives a larger percentage and a $5,000 cap; later years give a smaller percentage and a $2,500 cap.
  • Local newspaper publishers that earn most of their income from publishing local newspapers can claim a quarterly payroll tax credit for wages paid to qualifying local news journalists who work at least 200 hours in a quarter. The credit has per-employee and per-employer limits.
  • Employers cannot both take a deduction and claim the advertising credit for the same expense. The bill contains rules treating related companies as one employer for limits and eligibility.

Expenses#

No publicly available information on overall budget or government cost estimates in the bill text or metadata. The bill itself sets the following dollar limits and time limits:

  • Advertising credit caps: $5,000 in the first taxable year; $2,500 in subsequent taxable years.
  • Advertising credit percentages: 80% in the first taxable year; 50% thereafter.
  • Payroll credit percentages: 50% for each of the first four calendar quarters the credit applies; 30% thereafter.
  • Payroll credit limits: up to 1,500 employees counted per employer per quarter; up to $12,500 of wages per individual per quarter; credit cannot exceed applicable employment taxes for the quarter; excess may be refunded.
  • Both credits expire 5 years after the date of enactment.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.