Education Not Endless Scrolling

Summary#

This bill would add a new tax on large companies that host digital advertising services. It imposes a tax equal to 50 percent of the amount by which a covered taxpayer's gross receipts from hosting digital ads in the United States exceed $2,500,000,000 for the prior taxable year. A "covered taxpayer" is any company whose digital-ad-related gross receipts for the preceding year are at least $2,500,000,000. "Digital advertising services" include ads on websites and apps such as banner ads, search ads, interstitial ads, and sponsored shopping or search results. The Secretary of the Treasury must write rules to carry out the tax and may create a penalty for anyone who advertises or promotes virtual private network services to evade the tax.

The bill also creates three trust funds in the U.S. Treasury. Each trust fund is to receive an amount equal to one-third of the taxes collected under the new digital advertising tax: (1) a Local Journalism Preservation Trust Fund, (2) a One-on-One Tutoring Trust Fund, and (3) a Career and Technical Education Support Trust Fund. The tax rules apply for taxable years beginning after December 31, 2025. Transfers to the trust funds apply to taxes received after that date.

The Secretary of Education must award competitive grants to State educational agencies within 180 days after the bill becomes law. These grants will go to eligible schools (Title I elementary and secondary schools) to support individual tutoring programs. The bill also amends the Carl D. Perkins Career and Technical Education Act to allow amounts from the Career and Technical Education Support Trust Fund to be included in certain appropriations for Perkins programs starting in fiscal year 2027.

What it means for you#

  • Large companies that host digital ads and meet the revenue threshold could pay the new tax. The bill targets companies with at least $2.5 billion in ad-related gross receipts.
  • Title I schools could receive funds for one-on-one tutoring through state education agencies that win competitive grants.
  • Local journalism and career and technical education programs would have a new designated source of funding from tax receipts.

Expenses#

  • The bill directs one-third of the new tax receipts to each of three trust funds (local journalism, one-on-one tutoring, career and technical education).
  • The bill does not include dollar amounts, revenue estimates, or a cost estimate. No publicly available information on total expected revenue or net budgetary effects is included in the bill text.

Proponents' View#

  • The bill channels revenue from large digital advertising hosts to support local journalism, one-on-one tutoring for Title I schools, and career and technical education. It creates specific trust funds and a grant program to carry out those purposes. Supporters would point to those named uses as the intended benefits of the measure.

Opponents' View#

No publicly available information.