No Tax Breaks for Union Busting (NTBUB) Act

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. Short title This Act may be cited as the No Tax Breaks for Union Busting (NTBUB) Act 2. Findings Congress makes the following findings: (1) The National Labor Relations Act ( 29 U.S.C. 151 et seq. (2) The National Labor Relations Act further declares that it is the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing . . . (3) Despite Congress’ intention to give workers full agency in these matters, many employers regularly choose to involve themselves, lawfully or unlawfully, in the decisions of their employees about whether to avail themselves of their rights under the National Labor Relations Act and the Railway Labor Act ( 45 U.S.C. 151 et seq. (4) Employers frequently violate labor laws around organizing and collective action. The Economic Policy Institute finds that in approximately 4 of 10 labor organization elections in 2016-2017 employers were charged with committing an unfair labor practice. Among larger bargaining units of 61 employees or more, over 54 percent of elections have an unfair labor practice charge. (5) In practice, these unfair labor practices often include charges such as employees being illegally fired for labor organization activity, refusal to bargain in good faith with labor organizations, or coercion and intimidation. Employers also frequently use captive audience meetings, workplace surveillance, and other lawful or unlawful tactics to sway labor organization elections. (6) Whether or not there are charges of unlawful behavior, employers spend millions of dollars to sway the opinions of their employees with respect to whether or how to exercise their rights under the National Labor Relations Act and the Railway Labor Act. According to the Economic Policy Institute, companies spent $340,000,000 yearly on outside consultants to sway their workers' opinions about labor organization activities. This and other spending interfere with the United States' goal of encouraging the practice and procedure of collective bargaining (7) The Internal Revenue Code of 1986 has long recognized that spending by businesses with the purpose of influencing the general public with respect to elections, while it may be lawful, is not tax deductible. Congress should extend that principle to spending done by employers to influence workers’ elections and collective bargaining decisions. These free choices to exercise the rights to engage in collective bargaining, labor organization representation, and other lawful collective activities should be made without taxpayer subsidies of undue outside influence from employers. 3. Denial of deduction for attempting to influence employees with respect to labor organizations or labor organization activities (a) In general Section 162(e)(1) or , or (E) any attempt to influence the taxpayer's employees with respect to labor organizations or labor organization activities, including with respect to the opinion of such employees regarding such organizations or activities. . (b) Labor organizations; labor organization activities defined Section 162(e) (6) Labor organizations and labor organization activity defined For purposes of this subsection— (A) Labor organization The term labor organization 29 U.S.C. 402 (B) Labor organization activity (i) In general The term labor organization activity (ii) Other terms For purposes of clause (i)— (I) Collective action The term collective action 29 U.S.C. 157 45 U.S.C. 151 et seq. (II) Labor dispute The term labor dispute 29 U.S.C. 402 (III) Labor organization election The term labor organization election 29 U.S.C. 159 45 U.S.C. 152 . (c) Special rules (1) In general Section 162(e)(4) (D) Expenses relating to labor organizations or labor organization activities (i) In general For purposes of paragraph (1)(E), amounts paid or incurred in connection with attempting to influence the taxpayer's employees with respect to labor organizations or labor organization activities include— (I) any amount paid or incurred directly or indirectly by the taxpayer, including wages and other general and administrative costs, in connection with an action that results in— (aa) a complaint issued under section 10 of the National Labor Relations Act ( 29 U.S.C. 160 29 U.S.C. 158(a) (bb) a settlement offer related to an investigation by the National Labor Relations Board of a charge of an unfair labor practice under section 8(a) of such Act ( 29 U.S.C. 158(a) 29 U.S.C. 160 (cc) a finding of interference, influence, or coercion by a Federal court under section 2 of the Railway Labor Act ( 45 U.S.C. 152 (II) any amount paid or incurred directly or indirectly by the taxpayer, including wages and other general and administrative costs, in producing, conducting, or attending any meeting or training— (aa) which includes employees of the taxpayer who are or who could become members of a unit appropriate for the purposes of collective bargaining, and (bb) at which labor organizations or a labor organization activity is discussed, and (III) any amount which is required to be reported under the Labor-Management Reporting and Disclosure Act of 1959 ( 29 U.S.C. 401 et seq. (ii) Exceptions The following amounts shall not be treated as amounts paid or incurred in connection with attempting to influence the taxpayer's employees with respect to labor organizations or labor organization activities under paragraph (1)(E): (I) Amounts paid or incurred for communications or negotiations directly with the designated or selected representative of the employees of the taxpayer described in section 9(a) of the National Labor Relations Act ( 29 U.S.C. 159(a) 45 U.S.C. 151 et seq. (II) Amounts paid or incurred for communications directly with shareholders, as may be required under section 13 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m (III) Amounts paid or incurred for communications or consultations by the taxpayer in the process of voluntarily recognizing a labor organization as a representative in accordance with section 9 of the National Labor Relations Act ( 29 U.S.C. 159 (IV) Amounts paid or incurred with respect to the operation of a labor-management partnership described in a collective bargaining agreement in effect between a representative of employees of the taxpayer and the taxpayer, including a labor management committee established pursuant to section 205A(a) of the Labor Management Relations Act, 1947 ( 29 U.S.C. 175a(a) (V) Amounts paid or incurred for communications or consultations related to the operation of a grievance procedure described in a collective bargaining agreement in effect between a representative of employees of the taxpayer and the taxpayer. (VI) Amounts paid or incurred by a labor organization. (VII) Amounts paid or incurred for communication materials, including visual or audio media, required to be posted for, or provided to, employees of the taxpayer by law, including under the National Labor Relations Act ( 29 U.S.C. 151 et seq. 45 U.S.C. 151 et seq. (VIII) Amounts paid or incurred relating to a complaint which is issued by the National Labor Relations Board and which is set aside in full in accordance with subsection (e) or (f) of section 10 of such Act. . (2) Regulatory authority (A) In general Section 162(e) of such Code, as amended by subsection (b), is amended by redesignating paragraph (7) as paragraph (8) and by inserting after paragraph (6) the following new paragraph: (7) Regulations The Secretary shall prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this subsection, including rules relating to the timing of any deductions in connection with amounts described in paragraph (4)(D)(ii)(VIII). . (B) Timing Not later than the date that is 240 days after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall prescribe guidance, rules, or regulations with respect to the application of the amendments made by this Act. (d) Information reporting (1) Certain information included in tax returns (A) In general Part I of subchapter B of chapter 68 is amended by adding at the end the following new section: 6720D. Failure to include certain information with respect to employer activities relating to labor organizations (a) In general If any taxpayer who makes expenditures described in section 162(e)(1)(E) fails to provide with the return of tax for the taxable year to which such expenditures relate the information provided in subsection (c) with respect to such expenditures, or who fails to provide all of the information required under subsection (b) or fails to provide correct information, shall pay a penalty in the amount determined under subsection (b). (b) Determination of penalty amount (1) In general The amount of the penalty under this section for any failure described in subsection (a) shall be the greater of— (A) $10,000, or (B) the product of $1,000 and the number of full time equivalent employees of the employer (as determined under section 45R(d)(2)). (2) Increased penalty where failure continues (A) In general If any failure described in subsection (a) (1) continues for more than 90 days after the day on which the Secretary mails notice of such failure to the taxpayer, the taxpayer shall pay a penalty (in addition to the amount of any penalty under paragraph (1)) equal to the amount determined under paragraph (1) for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. (B) Limitation The penalty imposed under this paragraph with respect to any failure shall not exceed $100,000. (c) Information To be provided The information required under this subsection shall include— (1) the dates that such activities described in section 162(e)(1)(E) took place, (2) a statement indicating whether the activity was an activity described in item (aa), (bb), or (cc) of section 162(e)(4)(D)(i)(I), (3) the amounts paid or incurred for such activities, (4) a copy of any disclosures which are required to be reported under the Labor-Management Reporting and Disclosure Act of 1959 ( 29 U.S.C. 401 et seq. (5) such other information as the Secretary may prescribe. (d) Reasonable cause exception No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. . (B) Clerical amendment The table of sections for part I of subchapter B of chapter 68 is amended by adding at the end the following new item: Sec. 6720D. Failure to include certain information with respect to employer activities relating to labor organizations. . (2) Third-party information reporting (A) In general Subpart A of part III of subchapter A of chapter 61 6039K. Information with respect to certain employer activities relating to labor organizations (a) In general Any person conducting activities described in section 162(e)(1)(E) on behalf of another person shall file a return (at such time and in such manner as the Secretary may by regulations prescribe, which includes the information described in subsection (b)). (b) Information To be provided Information required under subsection (a) shall include— (1) the person on behalf of whom the activities described in section 162(e)(1)(E) were performed, (2) the dates that such activities described in such section took place, (3) a statement indicating whether the activity was an activity described in item (aa), (bb), or (cc) of section 162(e)(4)(D)(i)(I), (4) the amounts paid or incurred for such activities, and (5) such other information as the Secretary may prescribe. . (B) Penalty Subparagraph (B) of section 6724(d)(1) of such Code is amended— (i) by striking the comma at the end of clause (xxvii), as added by the Infrastructure Investment and Jobs Act, and inserting , or (ii) by adding at the end the following new clause: (xxviii) section 6039K (relating to information with respect to certain employer activities relating to labor organizations), and . (C) Clerical amendment The table of sections for subpart A of part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to section 6039J the following new item: Sec. 6039K. Information with respect to certain employer activities relating to labor organizations. . (e) Conforming amendments (1) The heading for subsection (e) of section 162 and political expenditures , political expenditures, and labor organization expenditures (2) The heading of subparagraph (C) of section 162(e)(4) of such Code is amended by striking and political activities , political, and labor organization activities (f) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after the date that is 240 days after the date of the enactment of this Act.

Summary: No Tax Breaks for Union Busting (NTBUB) Act This bill denies employers a tax deduction for any expenditures incurred for attempting to influence their employees with respect to labor organizations or labor organization activities, such as elections, labor disputes, and collective actions. The bill requires employers to report on their attempts to influence their employees with respect to labor organizations and their activities.