II 

118TH CONGRESS 

1ST SESSION S. 737 

To amend the Internal Revenue Code of 1986 to end the tax subsidy for 

employer efforts to influence their workers’ exercise of their rights around 

labor organizations and engaging in collective action. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2023 

Mr. CASEY (for himself, Mrs. MURRAY, Mr. WYDEN, Mr. VAN HOLLEN, Mr. 

BOOKER, Mr. SCHATZ, Ms. SMITH, Mr. REED, Mr. MURPHY, Mr. 

WELCH, Mr. DURBIN, Mr. MARKEY, Ms. WARREN, Ms. BALDWIN, Mr. 

LUJA ́N, Ms. KLOBUCHAR, Mr. MERKLEY, Mr. SANDERS, Mr. WHITEHOUSE, Mr. CARDIN, Mr. BROWN, Mr. BLUMENTHAL, Ms. STABENOW, 

Mr. PADILLA, Mr. MENENDEZ, Ms. HIRONO, Mr. FETTERMAN, Mr. 

PETERS, and Ms. CORTEZ MASTO) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to end the 

tax subsidy for employer efforts to influence their workers’ exercise of their rights around labor organizations 

and engaging in collective action. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘No Tax Breaks for 

5 Union Busting (NTBUB) Act’’. 


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1 SEC. 2. FINDINGS. 

2 Congress makes the following findings: 

3 (1) The National Labor Relations Act (29 

4 U.S.C. 151 et seq.) declares that it is the right of 

5 employees to form, join, or assist labor organiza6 tions. 

7 (2) The National Labor Relations Act further 

8 declares that it is ‘‘the policy of the United States 

9 to eliminate the causes of certain substantial ob10 structions to the free flow of commerce and to miti11 gate and eliminate these obstructions when they 

12 have occurred by encouraging the practice and pro13 cedure of collective bargaining and by protecting the 

14 exercise by workers of full freedom of association, 

15 self-organization, and designation of representatives 

16 of their own choosing . . .’’. 

17 (3) Despite Congress’ intention to give workers 

18 full agency in these matters, many employers regu19 larly choose to involve themselves, lawfully or unlaw20 fully, in the decisions of their employees about 

21 whether to avail themselves of their rights under the 

22 National Labor Relations Act and the Railway 

23 Labor Act (45 U.S.C. 151 et seq.). 

24 (4) Employers frequently violate labor laws 

25 around organizing and collective action. The Eco26 nomic Policy Institute finds that in approximately 4 


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1 of 10 labor organization elections in 2016-2017 em2 ployers were charged with committing an unfair 

3 labor practice. Among larger bargaining units of 61 

4 employees or more, over 54 percent of elections have 

5 an unfair labor practice charge. 

6 (5) In practice, these unfair labor practices 

7 often include charges such as employees being ille8 gally fired for labor organization activity, refusal to 

9 bargain in good faith with labor organizations, or co10 ercion and intimidation. Employers also frequently 

11 use captive audience meetings, workplace surveil12 lance, and other lawful or unlawful tactics to sway 

13 labor organization elections. 

14 (6) Whether or not there are charges of unlaw15 ful behavior, employers spend millions of dollars to 

16 sway the opinions of their employees with respect to 

17 whether or how to exercise their rights under the 

18 National Labor Relations Act and the Railway 

19 Labor Act. According to the Economic Policy Insti20 tute, companies spent $340,000,000 yearly on out21 side consultants to sway their workers’ opinions 

22 about labor organization activities. This and other 

23 spending interfere with the United States’ goal of 

24 ‘‘encouraging the practice and procedure of collective 

25 bargaining’’. 


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1 (7) The Internal Revenue Code of 1986 has 

2 long recognized that spending by businesses with the 

3 purpose of influencing the general public with re4 spect to elections, while it may be lawful, is not tax 

5 deductible. Congress should extend that principle to 

6 spending done by employers to influence workers’ 

7 elections and collective bargaining decisions. These 

8 free choices to exercise the rights to engage in collec9 tive bargaining, labor organization representation, 

10 and other lawful collective activities should be made 

11 without taxpayer subsidies of undue outside influ12 ence from employers. 

13 SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO IN14 FLUENCE EMPLOYEES WITH RESPECT TO 

15 LABOR ORGANIZATIONS OR LABOR ORGANI16 ZATION ACTIVITIES. 

17 (a) IN GENERAL.—Section 162(e)(1) of the Internal 

18 Revenue Code of 1986 is amended by striking ‘‘or’’ at the 

19 end of subparagraph (C), by striking the period at the end 

20 of subparagraph (D) and inserting ‘‘, or’’, and by adding 

21 at the end the following new subparagraph: 

22 ‘‘(E) any attempt to influence the tax23 payer’s employees with respect to labor organi24 zations or labor organization activities, includVerDate Sep 11 2014 01:10 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S737.IS S737

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1 ing with respect to the opinion of such employ2 ees regarding such organizations or activities.’’. 

3 (b) LABOR ORGANIZATIONS; LABOR ORGANIZATION

4 ACTIVITIES DEFINED.—Section 162(e) of the Internal 

5 Revenue Code of 1986 is amended by redesignating para6 graph (6) as paragraph (7) and by inserting after para7 graph (5) the following new paragraph: 

8 ‘‘(6) LABOR ORGANIZATIONS AND LABOR ORGA9 NIZATION ACTIVITY DEFINED.—For purposes of this 

10 subsection— 

11 ‘‘(A) LABOR ORGANIZATION.—The term 

12 ‘labor organization’ has the meaning given such 

13 term in section 3 of the Labor-Management Re14 porting and Disclosure Act of 1959 (29 U.S.C. 

15 402). 

16 ‘‘(B) LABOR ORGANIZATION ACTIVITY.— 

17 ‘‘(i) IN GENERAL.—The term ‘labor 

18 organization activity’ means labor organi19 zation elections, labor disputes, collective 

20 actions, and such other related activities 

21 identified by the Secretary. 

22 ‘‘(ii) OTHER TERMS.—For purposes of 

23 clause (i)— 

24 ‘‘(I) COLLECTIVE ACTION.—The 

25 term ‘collective action’ means any acVerDate Sep 11 2014 01:10 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S737.IS S737

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1 tion, including collective bargaining, 

2 described in section 7 of the National 

3 Labor Relations Act (29 U.S.C. 157) 

4 or any action that is a right of em5 ployees or labor organizations under 

6 the Railway Labor Act (45 U.S.C. 

7 151 et seq.). 

8 ‘‘(II) LABOR DISPUTE.—The 

9 term ‘labor dispute’ has the meaning 

10 given such term under section 3 of the 

11 Labor-Management Reporting and 

12 Disclosure Act of 1959 (29 U.S.C. 

13 402). 

14 ‘‘(III) LABOR ORGANIZATION

15 ELECTION.—The term ‘labor organi16 zation election’ means any election de17 scribed in section 9 of the National 

18 Labor Relations Act (29 U.S.C. 159) 

19 or section 2 of the Railway Labor Act 

20 (45 U.S.C. 152).’’. 

21 (c) SPECIAL RULES.— 

22 (1) IN GENERAL.—Section 162(e)(4) of the In23 ternal Revenue Code of 1986 is amended by adding 

24 at the end the following new subparagraph: 


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1 ‘‘(D) EXPENSES RELATING TO LABOR OR2 GANIZATIONS OR LABOR ORGANIZATION ACTIVI3 TIES.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 paragraph (1)(E), amounts paid or in6 curred in connection with attempting to in7 fluence the taxpayer’s employees with re8 spect to labor organizations or labor orga9 nization activities include— 

10 ‘‘(I) any amount paid or incurred 

11 directly or indirectly by the taxpayer, 

12 including wages and other general and 

13 administrative costs, in connection 

14 with an action that results in— 

15 ‘‘(aa) a complaint issued 

16 under section 10 of the National 

17 Labor Relations Act (29 U.S.C. 

18 160) against the taxpayer for an 

19 unfair labor practice under sec20 tion 8(a) of such Act (29 U.S.C. 

21 158(a)), 

22 ‘‘(bb) a settlement offer re23 lated to an investigation by the 

24 National Labor Relations Board 

25 of a charge of an unfair labor 


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1 practice under section 8(a) of 

2 such Act (29 U.S.C. 158(a)) that 

3 results in a settlement of such 

4 charge without issuance of a 

5 complaint under section 10 of 

6 such Act (29 U.S.C. 160), or 

7 ‘‘(cc) a finding of inter8 ference, influence, or coercion by 

9 a Federal court under section 2 

10 of the Railway Labor Act (45 

11 U.S.C. 152), 

12 ‘‘(II) any amount paid or in13 curred directly or indirectly by the 

14 taxpayer, including wages and other 

15 general and administrative costs, in 

16 producing, conducting, or attending 

17 any meeting or training— 

18 ‘‘(aa) which includes employ19 ees of the taxpayer who are or 

20 who could become members of a 

21 unit appropriate for the purposes 

22 of collective bargaining, and 

23 ‘‘(bb) at which labor organi24 zations or a labor organization 

25 activity is discussed, and 


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1 ‘‘(III) any amount which is re2 quired to be reported under the 

3 Labor-Management Reporting and 

4 Disclosure Act of 1959 (29 U.S.C. 

5 401 et seq.). 

6 ‘‘(ii) EXCEPTIONS.—The following 

7 amounts shall not be treated as amounts 

8 paid or incurred in connection with at9 tempting to influence the taxpayer’s em10 ployees with respect to labor organizations 

11 or labor organization activities under para12 graph (1)(E): 

13 ‘‘(I) Amounts paid or incurred 

14 for communications or negotiations di15 rectly with the designated or selected 

16 representative of the employees of the 

17 taxpayer described in section 9(a) of 

18 the National Labor Relations Act (29 

19 U.S.C. 159(a)) or under the Railway 

20 Labor Act (45 U.S.C. 151 et seq.). 

21 ‘‘(II) Amounts paid or incurred 

22 for communications directly with 

23 shareholders, as may be required 

24 under section 13 of the Securities Ex25 change Act of 1934 (15 U.S.C. 78m). 


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1 ‘‘(III) Amounts paid or incurred 

2 for communications or consultations 

3 by the taxpayer in the process of vol4 untarily recognizing a labor organiza5 tion as a representative in accordance 

6 with section 9 of the National Labor 

7 Relations Act (29 U.S.C. 159). 

8 ‘‘(IV) Amounts paid or incurred 

9 with respect to the operation of a 

10 labor-management partnership de11 scribed in a collective bargaining 

12 agreement in effect between a rep13 resentative of employees of the tax14 payer and the taxpayer, including a 

15 labor management committee estab16 lished pursuant to section 205A(a) of 

17 the Labor Management Relations Act, 

18 1947 (29 U.S.C. 175a(a)). 

19 ‘‘(V) Amounts paid or incurred 

20 for communications or consultations 

21 related to the operation of a grievance 

22 procedure described in a collective 

23 bargaining agreement in effect be24 tween a representative of employees of 

25 the taxpayer and the taxpayer. 


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1 ‘‘(VI) Amounts paid or incurred 

2 by a labor organization. 

3 ‘‘(VII) Amounts paid or incurred 

4 for communication materials, includ5 ing visual or audio media, required to 

6 be posted for, or provided to, employ7 ees of the taxpayer by law, including 

8 under the National Labor Relations 

9 Act (29 U.S.C. 151 et seq.) or the 

10 Railway Labor Act (45 U.S.C. 151 et 

11 seq.). 

12 ‘‘(VIII) Amounts paid or in13 curred relating to a complaint which 

14 is issued by the National Labor Rela15 tions Board and which is set aside in 

16 full in accordance with subsection (e) 

17 or (f) of section 10 of such Act.’’. 

18 (2) REGULATORY AUTHORITY.— 

19 (A) IN GENERAL.—Section 162(e) of such 

20 Code, as amended by subsection (b), is amend21 ed by redesignating paragraph (7) as paragraph 

22 (8) and by inserting after paragraph (6) the 

23 following new paragraph: 

24 ‘‘(7) REGULATIONS.—The Secretary shall pre25 scribe such guidance, rules, or regulations as are 


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1 necessary to carry out the purposes of this sub2 section, including rules relating to the timing of any 

3 deductions in connection with amounts described in 

4 paragraph (4)(D)(ii)(VIII).’’. 

5 (B) TIMING.—Not later than the date that 

6 is 240 days after the date of the enactment of 

7 this Act, the Secretary of the Treasury (or the 

8 Secretary’s delegate) shall prescribe guidance, 

9 rules, or regulations with respect to the applica10 tion of the amendments made by this Act. 

11 (d) INFORMATION REPORTING.— 

12 (1) CERTAIN INFORMATION INCLUDED IN TAX

13 RETURNS.— 

14 (A) IN GENERAL.—Part I of subchapter B 

15 of chapter 68 is amended by adding at the end 

16 the following new section: 

17 ‘‘SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION 

18 WITH RESPECT TO EMPLOYER ACTIVITIES 

19 RELATING TO LABOR ORGANIZATIONS. 

20 ‘‘(a) IN GENERAL.—If any taxpayer who makes ex21 penditures described in section 162(e)(1)(E) fails to pro22 vide with the return of tax for the taxable year to which 

23 such expenditures relate the information provided in sub24 section (c) with respect to such expenditures, or who fails 

25 to provide all of the information required under subsection 


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1 (b) or fails to provide correct information, shall pay a pen2 alty in the amount determined under subsection (b). 

3 ‘‘(b) DETERMINATION OF PENALTY AMOUNT.— 

4 ‘‘(1) IN GENERAL.—The amount of the penalty 

5 under this section for any failure described in sub6 section (a) shall be the greater of— 

7 ‘‘(A) $10,000, or 

8 ‘‘(B) the product of $1,000 and the num9 ber of full time equivalent employees of the em10 ployer (as determined under section 45R(d)(2)). 

11 ‘‘(2) INCREASED PENALTY WHERE FAILURE

12 CONTINUES.— 

13 ‘‘(A) IN GENERAL.—If any failure de14 scribed in subsection (a) (1) continues for more 

15 than 90 days after the day on which the Sec16 retary mails notice of such failure to the tax17 payer, the taxpayer shall pay a penalty (in addi18 tion to the amount of any penalty under para19 graph (1)) equal to the amount determined 

20 under paragraph (1) for each 30-day period (or 

21 fraction thereof) during which such failure con22 tinues after the expiration of such 90-day pe23 riod. 


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1 ‘‘(B) LIMITATION.—The penalty imposed 

2 under this paragraph with respect to any failure 

3 shall not exceed $100,000. 

4 ‘‘(c) INFORMATION TO BE PROVIDED.—The infor5 mation required under this subsection shall include— 

6 ‘‘(1) the dates that such activities described in 

7 section 162(e)(1)(E) took place, 

8 ‘‘(2) a statement indicating whether the activity 

9 was an activity described in item (aa), (bb), or (cc) 

10 of section 162(e)(4)(D)(i)(I), 

11 ‘‘(3) the amounts paid or incurred for such ac12 tivities, 

13 ‘‘(4) a copy of any disclosures which are re14 quired to be reported under the Labor-Management 

15 Reporting and Disclosure Act of 1959 (29 U.S.C. 

16 401 et seq.), and 

17 ‘‘(5) such other information as the Secretary 

18 may prescribe. 

19 ‘‘(d) REASONABLE CAUSE EXCEPTION.—No penalty 

20 shall be imposed by this section on any failure which is 

21 shown to be due to reasonable cause and not due to willful 

22 neglect.’’. 

23 (B) CLERICAL AMENDMENT.—The table of 

24 sections for part I of subchapter B of chapter 


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1 68 is amended by adding at the end the fol2 lowing new item: 

‘‘Sec. 6720D. Failure to include certain information with respect to employer 

activities relating to labor organizations.’’. 

3 (2) THIRD-PARTY INFORMATION REPORTING.— 

4 (A) IN GENERAL.—Subpart A of part III 

5 of subchapter A of chapter 61 of the Internal 

6 Revenue Code of 1986 is amended by inserting 

7 after section 6039J the following new section: 

8 ‘‘SEC. 6039K. INFORMATION WITH RESPECT TO CERTAIN 

9 EMPLOYER ACTIVITIES RELATING TO LABOR 

10 ORGANIZATIONS. 

11 ‘‘(a) IN GENERAL.—Any person conducting activities 

12 described in section 162(e)(1)(E) on behalf of another per13 son shall file a return (at such time and in such manner 

14 as the Secretary may by regulations prescribe, which in15 cludes the information described in subsection (b)). 

16 ‘‘(b) INFORMATION TO BE PROVIDED.—Information 

17 required under subsection (a) shall include— 

18 ‘‘(1) the person on behalf of whom the activities 

19 described in section 162(e)(1)(E) were performed, 

20 ‘‘(2) the dates that such activities described in 

21 such section took place, 

22 ‘‘(3) a statement indicating whether the activity 

23 was an activity described in item (aa), (bb), or (cc) 

24 of section 162(e)(4)(D)(i)(I), 


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1 ‘‘(4) the amounts paid or incurred for such ac2 tivities, and 

3 ‘‘(5) such other information as the Secretary 

4 may prescribe.’’. 

5 (B) PENALTY.—Subparagraph (B) of sec6 tion 6724(d)(1) of such Code is amended— 

7 (i) by striking the comma at the end 

8 of clause (xxvii), as added by the Infra9 structure Investment and Jobs Act, and in10 serting ‘‘, or’’, and 

11 (ii) by adding at the end the following 

12 new clause: 

13 ‘‘(xxviii) section 6039K (relating to 

14 information with respect to certain em15 ployer activities relating to labor organiza16 tions), and’’. 

17 (C) CLERICAL AMENDMENT.—The table of 

18 sections for subpart A of part III of subchapter 

19 A of chapter 61 of such Code is amended by in20 serting after the item relating to section 6039J 

21 the following new item: 

‘‘Sec. 6039K. Information with respect to certain employer activities relating to 

labor organizations.’’. 

22 (e) CONFORMING AMENDMENTS.— 

23 (1) The heading for subsection (e) of section 

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1 ed by striking ‘‘AND POLITICAL EXPENDITURES’’ 

2 and inserting ‘‘, POLITICAL EXPENDITURES, AND

3 LABOR ORGANIZATION EXPENDITURES’’. 

4 (2) The heading of subparagraph (C) of section 

5 162(e)(4) of such Code is amended by striking ‘‘AND

6 POLITICAL ACTIVITIES’’ and inserting ‘‘, POLITICAL, 

7 AND LABOR ORGANIZATION ACTIVITIES’’. 

8 (f) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to amounts paid or incurred in tax10 able years beginning after the date that is 240 days after 

11 the date of the enactment of this Act. 

Æ 


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