1. Short title
This Act may be cited as the “Local Journalism Sustainability Act”.
Local Journalism Sustainability Act
A BILL
To provide tax incentives that support local newspapers and other local media, and for other purposes.
2. Credit for local newspaper subscriptions
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:
“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 news and current events, and
“(B) at least 51 percent of the readers of such publication (including both print and digital versions) reside in—
“(i) a single State or a single possession of the United States, or
“(ii) a single area with a 200-mile radius.
“(2) 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.
“(3) 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.”
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:
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years ending after the date of the enactment of this Act.
3. Payroll credit for compensation of journalists
In general— In the case of an eligible newspaper employer, 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 the qualified journalism compensation paid to each individual for such calendar quarter.
Limitations and refundability—
Compensation taken into account— The amount of qualified journalism compensation paid with respect to any individual which may be taken into account under subsection (a) during any calendar quarter by the eligible newspaper employer shall not exceed $12,500.
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 newspaper employer for such calendar quarter.
Refundability of excess credit—
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.
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.
Definitions— For purposes of this section—
Applicable percentage— The term applicable percentage means—
in the case of each of the first 4 calendar quarters to which this section applies, 50 percent; and
in the case of each calendar quarter thereafter, 30 percent.
Eligible newspaper employer— The term eligible newspaper employer 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 from the trade or business of publishing print or digital publications—
the primary content of which is news and current events; and
at least 51 percent of the readers of which reside in—
a single State or a single possession of the United States; or
a single area with a 200-mile radius.
Qualified journalism compensation—
In general— The term qualified journalism compensation means—
wages paid by an eligible newspaper employer to an employee for service as a journalist; and
in the case of remuneration paid to an individual who is not an employee of the employer, such remuneration as would described in clause (i) if such individual were such an employee.
Journalist— The term journalist means any individual who regularly gathers, prepares, collects, photographs, records, writes, edits, reports, or publishes news or information that concerns local, national, or international events or other matters of public interest for dissemination to the public.
Secretary— The term Secretary means the Secretary of the Treasury or the Secretary’s delegate.
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.
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.
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.
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.
Election To have section Not apply— This section shall not apply with respect to any eligible newspaper employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply.
Special rules—
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.
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.
Third-party payors— Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code.
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.
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.
Regulations and guidance— The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary—
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;
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
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.
Application— This section shall only apply to the first 20 calendar quarters beginning after the date of the enactment of this Act.
4. Credit for advertising in local newspapers and local media
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:
“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 1,000.
“(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.”
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).”
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:
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years ending after the date of the enactment of this Act.