In the coming weeks, the U.S. Congress will consider trillions of dollars worth of spending bills. One particular piece of legislation could have a major impact on local news publishers.
The Local Journalism Sustainability Act was introduced to the U.S. House of Representatives by Reps. Ann Kirkpatrick and Dan Newhouse on June 16. Since then, it has generated bipartisan support from both sides of the aisle, and it’s been described as a lifeline for community publishers. As of late August, the bill had 41 co-sponsors. Supporters believe there’s a chance it could become a part of the spending bill that Congress is focusing on now.
The Local Journalism Sustainability Act defines local newspapers as print or digital publications that derive original content from primary sources related to news and current events. If the Local Journalism Sustainability Act were to pass, three tax credits would be offered for local journalism. These financial benefits are being offered as tax credits rather than grants.
To qualify for those tax credits, news publications should primarily serve the needs of a regional or local community. Publishers would need to employ at least one local journalist who lives in the area. Publishers with more than 750 employees would not qualify for the tax credit, based on how the bill is written in its current state.
Tax Credits for Local News Publishers
- $250 tax credit for subscriptions
- $50,000 annually for reporters
- Tax credit for small business advertisers
Subscriptions Credit
To receive a $250 credit for local news subscriptions, a subscriber must spend at least $312.50 in the first year and $500 over the following four years. The $250 subscription credit is designed to cover 80% of the cost of a subscription in the first year and 50% of the cost in the remaining years.
Journalist Credit
A $50,000 credit annually for reporters as part of the Local Journalism Sustainability Act is actually broken down as a five-year credit for publishers to employ and compensate qualified reporters. Publishers could receive up to $25,000 in the first year and $15,000 in the following years, maxing out at 50% of compensation in the first year and 30% over the next four years.
Newsroom employment fell 57% between 2008 and 2020, according to data from Pew Research, and that was before the Covid-19 pandemic. If the Local Journalism Sustainability Act passes, many local news publishers could afford to bring their workforce back.
Advertiser Credit
The third financial component in the Local Journalism Sustainability Act is a tax credit for small businesses that advertise with local news publishers. The bill would cover up to $5,000 in advertising costs in the first year and $2,500 over the next four years. This tax credit would apply to those small businesses that advertise in local newspapers, as well as local television and radio stations. Businesses would have to spend a minimum of $6,250 in the first year and $5,000 after to qualify for the credit.
The very existence of the Local Journalism Sustainability Act is a reminder to voters of how important community news publishers are to U.S. democracy. The bill would be a boon for digital publishers that rely primarily on advertising for revenue. However, it would be up to publishers themselves to promote the credits, so small business advertisers would become aware of the financial incentives.
To read the Local Journalism Sustainability Act in its entirety, click here.
