I 

116TH CONGRESS 

2D SESSION H. R. 7640 

To provide tax incentives that support local newspapers and other local 

media, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 16, 2020 

Mrs. KIRKPATRICK (for herself, Mr. NEWHOUSE, Mr. FITZPATRICK, Mr. 

SUOZZI, Mr. WELCH, Mr. RODNEY DAVIS of Illinois, Mr. MCKINLEY, Mr. 

VISCLOSKY, Mr. PETERSON, Mr. HARDER of California, Mr. HECK, Mr. 

TAKANO, Mr. CARSON of Indiana, Mr. FLEISCHMANN, Mr. GRIJALVA, 

Mr. LYNCH, and Mr. WEBER of Texas) 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. 

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 ‘‘Local Journalism Sus5 tainability Act’’. 

6 SEC. 2. CREDIT FOR LOCAL NEWSPAPER SUBSCRIPTIONS. 

7 (a) IN GENERAL.—Subpart A of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 25D the fol2 lowing new section: 

3 ‘‘SEC. 25E. LOCAL NEWSPAPER SUBSCRIPTIONS. 

4 ‘‘(a) IN GENERAL.—In the case of an individual, 

5 there shall be allowed as a credit against the tax imposed 

6 by this chapter for the taxable year an amount equal to 

7 the applicable percentage of amounts paid or incurred for 

8 subscriptions to one or more local newspapers for the per9 sonal use of the taxpayer. 

10 ‘‘(b) ANNUAL DOLLAR LIMITATION.—The credit al11 lowed under subsection (a) to any taxpayer for any taxable 

12 year shall not exceed $250. 

13 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 

14 this section, the term ‘applicable percentage’ means— 

15 ‘‘(1) in the case of the first taxable year to 

16 which this section applies, 80 percent, and 

17 ‘‘(2) in the case of any subsequent taxable year, 

18 50 percent. 

19 ‘‘(d) LOCAL NEWSPAPER.—For purposes of this sec20 tion— 

21 ‘‘(1) IN GENERAL.—The term ‘local newspaper’ 

22 means any print or digital publication if— 

23 ‘‘(A) the primary content of such publica24 tion is news and current events, and 


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1 ‘‘(B) at least 51 percent of the readers of 

2 such publication (including both print and dig3 ital versions) reside in— 

4 ‘‘(i) a single State or a single posses5 sion of the United States, or 

6 ‘‘(ii) a single area with a 200-mile ra7 dius. 

8 ‘‘(2) CONTINUOUS QUALIFICATION.—The re9 quirements of subparagraphs (A) and (B) of para10 graph (1) shall not be treated as met unless such re11 quirements are met at all times during the period 

12 beginning on the date which is 2 years before the 

13 date of the enactment of this section and ending on 

14 the date that the subscription described in sub15 section (a) is paid or incurred. 

16 ‘‘(3) APPLICATION TO CERTAIN ORGANIZATIONS

17 EXEMPT FROM TAX.—In the case of any print or 

18 digital publication which is published by any organi19 zation described in section 501(c) and exempt from 

20 tax under section 501(a)— 

21 ‘‘(A) such publication shall be treated as a 

22 local newspaper only if the publication of print 

23 and digital publications is the primary activity 

24 of such organization, and 


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1 ‘‘(B) any person making a charitable con2 tribution (as defined in section 170(c)) to such 

3 organization may elect to treat such contribu4 tion as an amount paid or incurred for a sub5 scription to which this section applies in lieu of 

6 treating such contribution as a charitable con7 tribution for purposes of section 170. 

8 ‘‘(e) TERMINATION.—No credit shall be allowed 

9 under this section for any amount paid or incurred in a 

10 taxable year ending after the close of 5-year period begin11 ning on the date of the enactment of this section.’’. 

12 (b) CLERICAL AMENDMENT.—The table of sections 

13 for subpart A of part IV of subchapter A of chapter 1 

14 is amended by inserting after the item relating to section 

15 25D the following new item: 

‘‘Sec. 25E. Local newpaper subscriptions.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to amounts paid or incurred in tax18 able years ending after the date of the enactment of this 

19 Act. 

20 SEC. 3. PAYROLL CREDIT FOR COMPENSATION OF JOUR21 NALISTS. 

22 (a) IN GENERAL.—In the case of an eligible news23 paper employer, there shall be allowed as a credit against 

24 the taxes imposed by section 3111(a) of the Internal Rev25 enue Code of 1986 for each calendar quarter an amount 


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1 equal to the applicable percentage of the qualified jour2 nalism compensation paid to each individual for such cal3 endar quarter. 

4 (b) LIMITATIONS AND REFUNDABILITY.— 

5 (1) COMPENSATION TAKEN INTO ACCOUNT.— 

6 The amount of qualified journalism compensation 

7 paid with respect to any individual which may be 

8 taken into account under subsection (a) during any 

9 calendar quarter by the eligible newspaper employer 

10 shall not exceed $12,500. 

11 (2) CREDIT LIMITED TO EMPLOYMENT

12 TAXES.—The credit allowed by subsection (a) with 

13 respect to any calendar quarter shall not exceed the 

14 applicable employment taxes (reduced by any credits 

15 allowed under subsections (e) and (f) of section 

16 3111 of the Internal Revenue Code of 1986, sections 

17 7001 and 7003 of the Families First Coronavirus 

18 Response Act, and section 2301 of the CARES Act) 

19 on the wages paid with respect to the employment 

20 of all the employees of the eligible newspaper em21 ployer for such calendar quarter. 

22 (3) REFUNDABILITY OF EXCESS CREDIT.— 

23 (A) IN GENERAL.—If the amount of the 

24 credit under subsection (a) exceeds the limita25 tion of paragraph (2) for any calendar quarter, 


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1 such excess shall be treated as an overpayment 

2 that shall be refunded under sections 6402(a) 

3 and 6413(b) of the Internal Revenue Code of 

4 1986. 

5 (B) TREATMENT OF PAYMENTS.—For pur6 poses of section 1324 of title 31, United States 

7 Code, any amounts due to the employer under 

8 this paragraph shall be treated in the same 

9 manner as a refund due from a credit provision 

10 referred to in subsection (b)(2) of such section. 

11 (c) DEFINITIONS.—For purposes of this section— 

12 (1) APPLICABLE PERCENTAGE.—The term ‘‘ap13 plicable percentage’’ means— 

14 (A) in the case of each of the first 4 cal15 endar quarters to which this section applies, 50 

16 percent; and 

17 (B) in the case of each calendar quarter 

18 thereafter, 30 percent. 

19 (2) ELIGIBLE NEWSPAPER EMPLOYER.—The 

20 term ‘‘eligible newspaper employer’’ means, with re21 spect to any calendar quarter, any employer if sub22 stantially all of the gross receipts of such employer 

23 for such calendar quarter are derived from the trade 

24 or business of publishing print or digital publica25 tions— 


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1 (A) the primary content of which is news 

2 and current events; and 

3 (B) at least 51 percent of the readers of 

4 which reside in— 

5 (i) a single State or a single posses6 sion of the United States; or 

7 (ii) a single area with a 200-mile ra8 dius. 

9 (3) QUALIFIED JOURNALISM COMPENSATION.— 

10 (A) IN GENERAL.—The term ‘‘qualified 

11 journalism compensation’’ means— 

12 (i) wages paid by an eligible news13 paper employer to an employee for service 

14 as a journalist; and 

15 (ii) in the case of remuneration paid 

16 to an individual who is not an employee of 

17 the employer, such remuneration as would 

18 described in clause (i) if such individual 

19 were such an employee. 

20 (B) JOURNALIST.—The term ‘‘journalist’’ 

21 means any individual who regularly gathers, 

22 prepares, collects, photographs, records, writes, 

23 edits, reports, or publishes news or information 

24 that concerns local, national, or international 


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1 events or other matters of public interest for 

2 dissemination to the public. 

3 (4) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of the Treasury or the Secretary’s del5 egate. 

6 (5) OTHER TERMS.—Any term used in this sec7 tion which is also used in chapter 21 of the Internal 

8 Revenue Code of 1986 shall have the same meaning 

9 as when used in such chapter. 

10 (d) AGGREGATION RULE.—All persons treated as a 

11 single employer under subsection (a) or (b) of section 52 

12 of the Internal Revenue Code of 1986, or subsection (m) 

13 or (o) of section 414 of such Code, shall be treated as 

14 one employer for purposes of this section. 

15 (e) CERTAIN RULES TO APPLY.—For purposes of 

16 this section, rules similar to the rules of sections 51(i)(1) 

17 and 280C(a) of the Internal Revenue Code of 1986 shall 

18 apply. 

19 (f) CERTAIN GOVERNMENTAL EMPLOYERS.—This 

20 credit shall not apply to the Government of the United 

21 States, the government of any State or political subdivi22 sion thereof, or any agency or instrumentality of any of 

23 the foregoing. 

24 (g) ELECTION TO HAVE SECTION NOT APPLY.— 

25 This section shall not apply with respect to any eligible 


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1 newspaper employer for any calendar quarter if such em2 ployer elects (at such time and in such manner as the Sec3 retary may prescribe) not to have this section apply. 

4 (h) SPECIAL RULES.— 

5 (1) EMPLOYEE NOT TAKEN INTO ACCOUNT

6 MORE THAN ONCE.—An employee shall not be in7 cluded for purposes of this section for any period 

8 with respect to any employer if such employer is al9 lowed a credit under section 51 of the Internal Rev10 enue Code of 1986 with respect to such employee for 

11 such period. 

12 (2) DENIAL OF DOUBLE BENEFIT.—Any wages 

13 taken into account in determining the credit allowed 

14 under this section shall not be taken into account for 

15 purposes of determining the credit allowed under 

16 section 45S of such Code. 

17 (3) THIRD-PARTY PAYORS.—Any credit allowed 

18 under this section shall be treated as a credit de19 scribed in section 3511(d)(2) of such Code. 

20 (i) TRANSFERS TO FEDERAL OLD-AGE AND SUR21 VIVORS INSURANCE TRUST FUND.—There are hereby ap22 propriated to the Federal Old-Age and Survivors Insur23 ance Trust Fund and the Federal Disability Insurance 

24 Trust Fund established under section 201 of the Social 

25 Security Act (42 U.S.C. 401) amounts equal to the reducVerDate Sep 11 2014 05:16 Aug 07, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7640.IH H7640

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1 tion in revenues to the Treasury by reason of this section 

2 (without regard to this subsection). Amounts appropriated 

3 by the preceding sentence shall be transferred from the 

4 general fund at such times and in such manner as to rep5 licate to the extent possible the transfers which would have 

6 occurred to such Trust Fund or Account had this section 

7 not been enacted. 

8 (j) TREATMENT OF DEPOSITS.—The Secretary shall 

9 waive any penalty under section 6656 of the Internal Rev10 enue Code of 1986 for any failure to make a deposit of 

11 any applicable employment taxes if the Secretary deter12 mines that such failure was due to the reasonable anticipa13 tion of the credit allowed under this section. 

14 (k) REGULATIONS AND GUIDANCE.—The Secretary 

15 shall issue such forms, instructions, regulations, and guid16 ance as are necessary— 

17 (1) to allow the advance payment of the credit 

18 under subsection (a), subject to the limitations pro19 vided in this section, based on such information as 

20 the Secretary shall require; 

21 (2) to provide for the reconciliation of such ad22 vance payment with the amount advanced at the 

23 time of filing the return of tax for the applicable cal24 endar quarter or taxable year; and 


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1 (3) with respect to the application of the credit 

2 under subsection (a) to third-party payors (including 

3 professional employer organizations, certified profes4 sional employer organizations, or agents under sec5 tion 3504 of the Internal Revenue Code of 1986), 

6 including regulations or guidance allowing such 

7 payors to submit documentation necessary to sub8 stantiate the eligible employer status of employers 

9 that use such payors. 

10 (l) APPLICATION.—This section shall only apply to 

11 the first 20 calendar quarters beginning after the date of 

12 the enactment of this Act. 

13 SEC. 4. CREDIT FOR ADVERTISING IN LOCAL NEWSPAPERS 

14 AND LOCAL MEDIA. 

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 is amended by adding at the end the following new 

18 section: 

19 ‘‘SEC. 45U. ADVERTISING IN LOCAL NEWSPAPERS AND 

20 LOCAL MEDIA. 

21 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

22 the case of any eligible small business, the local media ad23 vertising credit determined under this section for any tax24 able year is an amount equal to the applicable percentage 


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1 of the qualified local media advertising expenses paid or 

2 incurred by the taxpayer during such taxable year. 

3 ‘‘(b) LIMITATION.—The credit allowed under sub4 section (a) to any taxpayer for any taxable year shall not 

5 exceed— 

6 ‘‘(1) in the case of the first taxable year to 

7 which this section applies, $5,000, and 

8 ‘‘(2) in the case of any subsequent taxable year, 

9 $2,500. 

10 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 

11 this section, the term ‘applicable percentage’ means— 

12 ‘‘(1) in the case of the first taxable year to 

13 which this section applies, 80 percent, and 

14 ‘‘(2) in the case of any subsequent taxable year, 

15 50 percent. 

16 ‘‘(d) ELIGIBLE SMALL BUSINESS.—For purposes of 

17 this section, the term ‘eligible small business’ means any 

18 person for any taxable year if the average number of full19 time employees (as determined for purposes of deter20 mining whether an employer is an applicable large em21 ployer for purposes of section 4980H(c)(2) of the Internal 

22 Revenue Code of 1986) employed by such person during 

23 such taxable year was less than 1,000. 

24 ‘‘(e) QUALIFIED LOCAL MEDIA ADVERTISING EX25 PENSES.—For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified local 

2 media advertising expenses’ means amounts paid or 

3 incurred in the ordinary course of a trade or busi4 ness for advertising in a local newspaper (as defined 

5 in section 25E(d)) or a broadcast of a local radio or 

6 television station. 

7 ‘‘(2) LOCAL RADIO OR TELEVISION STATION.— 

8 The term ‘local radio or television station’ means 

9 any broadcast radio or television station licensed by 

10 the Federal Communications Commission to serve a 

11 local community. 

12 ‘‘(f) SPECIAL RULES.— 

13 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc14 tion shall be allowed for any qualified local media 

15 advertising expenses otherwise allowable as a deduc16 tion for the taxable year which is equal to the 

17 amount of the credit determined for such taxable 

18 year under subsection (a). 

19 ‘‘(2) AGGREGATION RULE.—All persons treated 

20 as a single employer under subsection (a) or (b) of 

21 section 52 of the Internal Revenue Code of 1986, or 

22 subsection (m) or (o) of section 414 of such Code, 

23 shall be treated as one employer for purposes of this 

24 section. 


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1 ‘‘(g) TERMINATION.—No credit shall be allowed 

2 under this section for any amount paid or incurred in a 

3 taxable year ending after the close of 5-year period begin4 ning on the date of the enactment of this section.’’. 

5 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI6 NESS CREDIT.—Section 38(b), as amended by the pre7 ceding provisions of this Act, is further amended by strik8 ing ‘‘plus’’ at the end of paragraph (32), by striking the 

9 period at the end of paragraph (33) and inserting ‘‘, plus’’, 

10 and by adding at the end the following new paragraph: 

11 ‘‘(34) in the case of an eligible small business, 

12 the local media advertising credit determined under 

13 section 45U(a).’’. 

14 (c) CLERICAL AMENDMENT.—The table of sections 

15 for subpart D of part IV of subchapter A of chapter 1 

16 of such Code is amended by adding at the end the fol17 lowing new item: 

‘‘Sec. 45U. Advertising in local newspapers and local media.’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to amounts paid or incurred in tax20 able years ending after the date of the enactment of this 

21 Act. 

Æ 


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