II 117th CONGRESS 1st Session S. 2434 IN THE SENATE OF THE UNITED STATES July 22, 2021 Ms. Cantwell (for herself, Mr. Kelly , and Mr. Wyden ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide tax incentives that support local newspapers and other local media, and for other purposes.

1. Short title This Act may be cited as the Local Journalism Sustainability Act . 2. Credit for local newspaper subscriptions (a) 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 original content derived from primary sources and relating to news and current events, (B) such publication primarily serves the needs of a regional or local community, (C) the publisher of such publication employs at least one local news journalist who resides in such regional or local community, and (D) the publisher of such publication employs not greater than 1,000 employees. (2) Local news journalist For purposes of paragraph (1)(C), the term local news journalist means any individual who regularly gathers, collects, photographs, records, writes, or reports news or information that concerns local events or other matters of local public interest. (3) Aggregation rule (A) In general For purposes of subparagraphs (C) and (D) of paragraph (1), all persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one person. (B) Exception Subparagraph (A) shall not apply unless such persons are involved in the production of the same print or digital publication. (4) 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. (5) 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. . (b) Clerical amendment The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25D the following new item: Sec. 25E. Local newspaper subscriptions. . (c) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this Act. 3. Payroll credit for compensation of local news journalists (a) In general Subchapter D of chapter 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 3135. Local news journalist compensation credit (a) In general In the case of an eligible local news journalist employer, there shall be allowed as a credit against the taxes imposed by section 3111(a) for each calendar quarter an amount equal to the applicable percentage of wages paid by such employer to local news journalists for such calendar quarter. (b) Limitations and refundability (1) Wages taken into account The amount of wages paid with respect to any individual which may be taken into account under subsection (a) during any calendar quarter by the eligible local news journalist employer shall not exceed $12,500. (2) 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, section 3131, 3132, and 3134) on the wages paid with respect to the employment of all the employees of the eligible local news journalist employer for such calendar quarter. (3) Refundability of excess credit 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). (c) Definitions For purposes of this section— (1) Applicable percentage The term applicable percentage means— (A) in the case of each of the first 4 calendar quarters to which this section applies, 50 percent, and (B) in the case of each calendar quarter thereafter, 30 percent. (2) Eligible local news journalist employer (A) In general The term eligible local news journalist employer means, with respect to any calendar quarter, any employer which— (i) is— (I) an eligible local newspaper publisher, (II) an eligible digital news organization, (III) a broadcast station, or (IV) a public broadcasting entity, and (ii) employs local news journalists. (B) Eligible local newspaper publisher The term eligible local newspaper publisher 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 in the trade or business of publishing local newspapers (as defined in section 25E(d)(1)). (C) Eligible digital news organization The term eligible digital news organization means a digital information content provider which is engaged in the creation of original local or regional news and information. (D) Broadcast station The term broadcast station has the meaning given such term under section 3 of the Communications Act of 1934 ( 47 U.S.C. 153 ). (E) Public broadcasting entity The term public broadcasting entity has the meaning given such term under section 397(11) of the Communications Act of 1934 ( 47 U.S.C. 397(11) ). (3) Local news journalist The term local news journalist means— (A) with respect to any eligible local newspaper publisher for any calendar quarter, any individual who provides at least 100 hours of service during such quarter in the gathering, collecting, photographing, recording, writing, or reporting news or information that concerns local events or other matters of local public interest during such calendar quarter to such employer, and (B) with respect to any eligible digital news organization, broadcast station, or public broadcasting entity for any calendar quarter, any individual who provides at least 100 hours of service during such quarter in the original reporting, gathering, collecting, writing, editing, producing, verification, recording, photographing, presentation, design, or technology support of news or information that concerns regional or local events or other matters of regional or local public interest. (4) Other terms Any term used in this section which is also used in this chapter shall have the same meaning as when used in such chapter. (d) Aggregation rule (1) In general All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one employer for purposes of this section. (2) Exception Paragraph (1) shall not apply unless such persons are involved in the production of the same print or digital publication. (e) Certain rules To apply For purposes of this section, rules similar to the rules of sections 51(i)(1) and 280C(a) shall apply. (f) Certain governmental employers (1) In general 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. (2) Exception Paragraph (1) shall not apply to any public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 ( 47 U.S.C. 397(11) )). (g) Election To have section not apply This section shall not apply with respect to any eligible local news journalist employer for any calendar quarter if such person elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply. (h) Special rules (1) 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 with respect to such employee for such period. (2) 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. (3) Third-party payors Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. (i) Treatment of deposits The Secretary shall waive any penalty under section 6656 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. (j) Extension of Limitation on Assessment Notwithstanding section 6501, the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 5 years after the later of— (1) the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed, or (2) the date on which such return is treated as filed under section 6501(b)(2). (k) Regulations and guidance The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary— (1) 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, (2) 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, (3) 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), including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors, and (4) to prevent the avoidance of the purposes of the limitations under this section. Any forms, instructions, regulations, or other guidance described in paragraph (3) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third-party payor to accurately report such tax credits based on the information provided by the customer. (l) Application This section shall only apply to wages paid in calendar quarters beginning after the date of the enactment of this section and beginning before the date that is 5 years after the first day of the first calendar quarter to which this section applies. . (b) Refunds Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 3135, after 3134, . (c) Clerical amendment The table of sections for subchapter D of chapter 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following: Sec. 3135. Local news journalist compensation credit. . (d) Effective date The amendments made by this section shall apply to calendar quarters beginning after the date of the enactment of this Act. 4. Credit for advertising in local newspapers and local media (a) 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 50. (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— (A) in a local newspaper (as defined in section 25E(d)), or (B) through a broadcast of, or in the digital content or digital publications 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. . (b) Credit allowed as part of general business credit Section 38(b) of the Internal Revenue Code of 1986 is 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). . (c) 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: Sec. 45U. Advertising in local newspapers and local media. . (d) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this Act.