To amend the Internal Revenue Code of 1986 to impose a tax on digital advertising services, and for other purposes.
Sponsors
Legislative Progress
IntroducedMr. Auchincloss (for himself and Ms. Goodlander) introduced the following …
Summary
What This Bill Does
This bill creates a new 50% tax on large digital advertising companies (those earning more than $2.5 billion annually from digital ads). The tax applies to revenue above the $2.5 billion threshold. The proceeds are split three ways: one-third goes to a Local Journalism Trust Fund (to eventually fund tax credits for hiring journalists), one-third to a One-on-One Tutoring Trust Fund (for K-12 tutoring grants), and one-third to a Career and Technical Education Trust Fund.
Who Benefits and How
Local journalism outlets and journalists benefit from potential future tax credits for hiring. K-12 students at Title I schools benefit from funded tutoring programs. Career and technical education programs receive additional federal funding. Small businesses may benefit from future tax credits for advertising in local news. Educational service providers and tutoring companies gain new revenue opportunities from government grants.
Who Bears the Burden and How
Large digital advertising platforms (like Google, Meta, Amazon) face a massive new 50% tax on US advertising revenue above $2.5 billion - potentially billions in new tax liability. VPN service providers face penalties if they promote using VPNs to evade this tax. The tax burden falls almost entirely on a handful of the largest tech companies.
Key Provisions
- 50% tax on digital advertising revenue exceeding $2.5 billion annually
- Creates Local Journalism Preservation Trust Fund (1/3 of tax revenue)
- Creates One-on-One Tutoring Trust Fund with grant program for Title I schools (1/3 of tax revenue)
- Creates Career and Technical Education Support Trust Fund (1/3 of tax revenue)
- Penalty for promoting VPN services to evade the tax
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Imposes a 50% tax on digital advertising services revenues exceeding $2.5 billion from large tech companies and directs the proceeds to three trust funds supporting local journalism, K-12 tutoring programs, and career technical education.
Policy Domains
Legislative Strategy
"Target a narrow group of very large tech companies with a high tax rate to fund broadly popular education and journalism programs"
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "the_secretary"
- → Secretary of Education
Note: 'The Secretary' refers to Secretary of the Treasury in tax sections (2-5) but Secretary of Education in grant program section (6)
Key Definitions
Terms defined in this bill
An elementary school or secondary school that receives funds under Title I of the Elementary and Secondary Education Act of 1965
Any person engaged in hosting digital advertising services with at least $2,500,000,000 in gross receipts from such services in the preceding taxable year
Any type of software, including a website, a part of a website, or an application
Advertisement services on digital interfaces, including banner advertising, search engine advertising, interstitial advertising, sponsored shopping and search results, and other comparable advertising services
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology