To amend the Internal Revenue Code of 1986 to provide tax credits for carriage of independent programmers by qualified distributors and multichannel video programming distributors.

To amend the Internal Revenue Code of 1986 to provide tax credits for carriage of independent programmers by qualified distributors and multichannel video programming distributors. 1. Carriage of Independent Programmers Tax Credit (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. Carriage of Independent Programmers Credit (a) Allowance of credit For purposes of section 38, in the case of any eligible distributor, the carriage of independent programmers credit determined under this section for the taxable year is, with respect to each agreement for qualifying carriage entered into by such eligible distributor, the lesser of— (1) the net license fees paid or incurred by such eligible distributor during such taxable year under such agreement for qualifying carriage, or (2) the product of $0.10 multiplied by the number of subscribers per month to which carriage is provided under such agreement. (b) Maximum credit The credit determined under this section with respect to any eligible distributor for any taxable year shall not exceed the product of— (1) $0.10, multiplied by (2) 3 times the average number of subscribers of the eligible distributor on days during such taxable year. (c) Definitions and special rules For purposes of this section— (1) Eligible distributor The term eligible distributor (A) any person engaged in the trade or business of being a qualified distributor or multichannel video programming distributor, as such term is defined in section 76.1000 of title 47 of the Code of Federal Regulations, and (B) any person engaged in the trade or business of being a virtual multichannel video programming distributor. (2) Agreement for qualifying carriage The term agreement for qualifying carriage (3) Qualified independent programmer The term qualified independent programmer (A) means a United States-based person engaged in the production, creation, or wholesale distribution of three or fewer television channels in which no multichannel video programming distributor, cable programmer, or broadcast network has attributable interest, as such term is defined by section 1000(b) of title 47 of the Code of Federal Regulations, and (B) includes rural, women, socially disadvantaged, and minority-owned programmers. (4) Cable programmer The term cable programmer (5) License fees Except as otherwise provided by the Secretary, in the case of an agreement for qualifying carriage which is net effective rate positive for the qualified independent programmer, the appropriate amount shall be treated as a license fee paid by the eligible distributor to the qualified independent programmer. (6) Socially disadvantaged The term socially disadvantaged (d) Denial of double benefit No deduction shall be allowed under this chapter for any amount to the extent that such amount is allowed as a credit under this section. . (b) Credit made part of general business credit Subsection (b) of section 38 of such Code is amended by striking plus , plus (34) the carriage of independent programmers credit determined under section 45U. . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 45U. Carriage of Independent Programmers Credit. . (d) Effective date The amendments made by this section shall apply to expenses made or incurred after December 31, 2020, in taxable years ending after such date.

Summary: This bill allows a new tax credit for carriage of qualified independent programmers by eligible distributors and multichannel video programming distributors based on license fees and the number of subscribers. The bill defines eligible distributor as any person engaged in the trade or business of a qualified distributor or multichannel video programming distributor and any person engaged in the trade or business of being a virtual multichannel video programming distributor. The term multchannel video programming distributor is defined in federal regulations as any entity engaged in the business of making available for purchase, by subscribers or customers, multiple channels of video programming. Such entities include, but are not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a television receive-only satellite program distributor, and a satellite master antenna television system operator, as well as buying groups or agents of all such entities. The bill defines qualified independent programmer as a U.S.-based person engaged in the production, creation, or wholesale distribution of three or fewer television channels in which no multichannel video programming distributor, cable programmer, or broadcast network has attributable interest, and includes rural, women, socially disadvantaged, and minority-owned programmers.