Payroll Tax Credit for Local Journalism in the House Leadership Version of the Build Back Better Act

SEC. 138516. PAYROLL CREDIT FOR COMPENSATION OF LOCAL NEWS JOURNALISTS.

(a) IN GENERAL.—Subchapter D of chapter 21 is amended by adding at the end the following new section:

‘‘SEC. 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(b) for each cal- endar quarter an amount equal to the applicable percent- age of wages paid by such employer to local news journal- ists for such calendar quarter.

‘‘(b) LIMITATIONS AND REFUNDABILITY . —

‘‘(1) NUMBER OF LOCAL NEWS JOURNALISTS TAKEN INTO ACCOUNT.—The number of local news journalists which may be taken into account under subsection (a) with respect to any eligible local news journalist employer for any calendar quarter shall not exceed 1,500.

‘‘(2) 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.

‘‘(3) CREDIT LIMITED TO EMPLOYMENT TAXES.—The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the taxes imposed by section 3111(b) on the wages paid with respect to the employment of all the employees of the eligible local news journalist employer for such calendar quarter.

‘‘(4) REFUNDABILITY OF EXCESS CREDIT.—If the amount of the credit under subsection (a) exceeds the limitation of paragraph (3) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b).

‘‘(c) ELIGIBLE LOCAL NEWS JOURNALIST EMPLOYER. —For purposes of this section—

‘‘(1) IN GENERAL.—The term ‘eligible local news journalist employer’ means, with respect to any calendar quarter, any employer which—

‘‘(A) is— ‘

‘(i) an eligible local news organization, or

‘‘(ii) a qualifying broadcast station,

and

‘‘(B) employs local news journalists.

‘‘(2) ELIGIBLE LOCAL NEWS ORGANIZATION.— The term ‘eligible local news organization’ means, with respect to any calendar quarter, any employer—

‘‘(A) which publishes one or more qualifying publications during the calendar quarter, ‘‘(B) which is not a disqualified organization, and

‘‘(C) which did not derive more than 50 percent of its gross receipts for such calendar quarter from disqualified organizations.

‘‘(3) QUALIFYING BROADCAST STATION.—The term ‘qualifying broadcast station’ means, with re- spect to any calendar quarter, any employer—

‘‘(A) which owns or operates a broadcast station (as defined in section 3 of the Communications Act of 1934),

‘‘(B) which is not a disqualified organization,

‘‘(C) which did not derive more than 50 percent of its gross receipts for such calendar quarter from disqualified organizations, and

‘‘(D) which discloses its ownership to the public at such times and in such manner as identified by the Secretary.

‘‘(d) OTHER 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) LOCAL NEWS JOURNALIST.—

‘‘(A) IN GENERAL.—The term ‘local news journalist’ means, with respect to any eligible local news journalist employer for any calendar quarter, any full-time employee (as defined in section 4980H(c)(4)) who—

‘‘(i) provides qualified services for an average of not less than 30 hours per week for each week during which such employee is employed by the eligible local news journalist employer during the calendar quarter, and

‘‘(ii) resides within 50 miles of the local community with respect to the qualifying publication or qualifying broadcast station with respect to which the qualified services are provided.

‘‘(B) QUALIFIED SERVICES.—For purposes of subparagraph (A)(ii), the term ‘qualified services’ means services—

‘‘(i) which consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing original local community news for dissemination to the local community, and

‘‘(ii) which are provided with respect to—

‘‘(3) QUALIFYING PUBLICATION.—The term ‘qualifying publication’ means, with respect to any calendar quarter, any print or digital publication—

‘‘(A) the primary purpose of which is to serve a local community by providing local news, which—

‘‘(i) is published during the calendar quarter, and

‘‘(ii) has been published during each of the 4 calendar quarters preceding such calendar quarter,

‘‘(C) which is covered by media liability insurance for such calendar quarter,

‘‘(D) which discloses its ownership to the public at such times and in such manner as identified by the Secretary, and

‘‘(E) which receives services from not more than 1,500 persons during such calendar quarter.

‘‘(4) LOCAL COMMUNITY.—The term ‘local community’ means, with respect to any qualifying broadcast station or qualifying publication, a geographically contiguous area that does not exceed the boundaries of—

‘‘(A) in the case of a qualifying broadcast station, the area for which the qualifying broadcast station is licensed to serve by the Federal Communications Commission under section 307 of the Communications Act of 1934, and

‘‘(B) in the case of a qualifying publication—

‘‘(i) the metropolitan or micropolitan statistical area, as defined by the Office of Management and Budget, in which the qualifying publication is primarily distributed,

‘‘(ii) if such qualifying publication is not primarily distributed in a metropolitan or micropolitan statistical area, political subdivision of the State in which such qualifying publication is primarily distributed, or

‘‘(iii) if such qualifying publication is not primarily distributed in a metropolitan or micropolitan statistical area or a political subdivision of a State, the State in which such qualifying publication is primarily distributed.

For purposes of subparagraph (B), in the case of a qualifying publication which is a digital publication, such qualifying publication shall be considered to be

primarily distributed in the area where such publication is primarily consumed.
1.6  ‘‘(5) DISQUALIFIED ORGANIZATION.—The term ‘disqualified organization’ means—

‘‘(A) any organization described in section 501(c)(4) and exempt from tax under section 501(a),

‘‘(B) any organization described in section 527, and

‘‘(C) any organization that is owned or controlled (directly or indirectly) by one or more organizations described in subparagraph (A) or (B).

‘‘(6) GROSS RECEIPTS.—

‘‘(A) IN GENERAL.—Except as provided in subparagraph (B), the term ‘gross receipts’ has the meaning given such term as used in section 448(c).

‘‘(B) TAX-EXEMPT ORGANIZATIONS.—In the case of an organization which is described in section 501(c) and exempt from tax under section 501(a), any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033.

‘‘(7) 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.

‘‘(e) AGGREGATION RULE .—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.

‘‘(f) CERTAIN RULES TO APPLY.—

‘‘(1) IN GENERAL.—For purposes of this section—

‘‘(A) except as provided in paragraph (2), rules similar to the rules of section 51(i)(1) shall apply, and

‘‘(B) rules similar to the rules of section 280C(a) shall apply.

‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not apply with respect to any local news journalist of an eligible local news journalist employer which employs fewer than 15 local news journalists during the calendar quarter.

‘‘(g) 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))).

‘‘(h) 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 employer elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply.

‘‘(i) 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 41, 45A, 45P, 45S, or 1396.

‘‘(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.

‘‘(j) TREATMENT OF DEPOSITS.—

The Secretary shall waive any penalty under section 6656 for any failure to make a deposit of any taxes imposed under section 3111(b) if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section.

‘‘(k) 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).

‘‘(l) REGULATIONS AND GUIDANCE.—

The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary—

‘‘(1) 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

‘‘(2) to prevent the avoidance of the purposes of the limitations under this section. Any forms, instructions, regulations, or other guidance described in paragraph

(1) 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.

‘‘(m) 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.’’.
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 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.