HR1753-119

What This Bill Does

The Community News and Small Business Support Act creates two tax credits aimed at local news economics. First, eligible small businesses with fewer than 50 full-time employees can claim a local media advertising credit for qualified local media advertising expenses. The credit equals 80 percent of expenses in the first taxable year, capped at $5,000, and 50 percent in later taxable years, capped at $2,500. Second, eligible local news journalist employers can claim a quarterly payroll tax credit for wages paid to local news journalists, capped at 1,500 journalists and $12,500 of wages per journalist per quarter. The payroll credit is limited by applicable employment taxes, with excess amounts carried forward. The bill subsidizes both demand for local advertising and newsroom payroll costs.

Who Benefits and How

Eligible small businesses benefit from a tax credit for buying advertising from local media outlets. Local newspapers and broadcasters benefit if small businesses buy more local advertising. Local news journalist employers benefit from a payroll tax credit for wages paid to local journalists. Local news journalists benefit if the payroll credit helps employers retain or hire newsroom staff.

Who Bears the Burden and How

Internal Revenue Service administrators must implement and audit the advertising and payroll credits. Small businesses claiming the advertising credit must document qualified local media expenses and employee counts. Local news employers must track eligible journalist wages, quarterly caps, employment taxes, and carryforwards. Federal taxpayers bear the cost of the advertising and journalist compensation credits.

Key Provisions

• Creates a local media advertising credit for eligible small businesses.
• Limits the advertising credit to $5,000 in the first year and $2,500 in later years.
• Provides an 80 percent first-year and 50 percent later-year credit rate for qualified local media advertising expenses.
• Creates a payroll tax credit for local news journalist compensation.
• Limits journalist payroll credit calculations to 1,500 employees and $12,500 of wages per journalist per quarter.