Summary:

 Senate Bill 110 (SB 110) establishes the Local Journalist Employment Income Tax Credit and the Local Journalist Employment Corporate Income Tax Credit. The bill allows owners of qualifying local news organizations and corporations to claim a tax credit equal to 30% of wages paid to journalists, subject to a $4 million annual cap on total credits certified statewide. Eligible taxpayers must apply for certification, and unused credits are refundable. SB 110 applies to taxable years beginning on or after January 1, 2025, and sunsets on January 1, 2030. 

Legislation Overview:

 Senate Bill 110 (SB 110) proposes to incentivize local journalism by introducing two tax credits: the Local Journalist Employment Income Tax Credit and the Local Journalist Employment Corporate Income Tax Credit. The income tax credit is available to individual taxpayers who own local news organizations employing journalists, while the corporate income tax credit applies to corporations classified as local news organizations. Both credits are equal to 30% of wages paid to eligible journalists, with a maximum wage cap of $50,000 per journalist per taxable year. The credits are refundable, meaning that any amount exceeding a taxpayer’s liability will be paid out as a refund.

The bill limits tax credit eligibility to a maximum of 75 journalists per organization per taxable year. Additionally, the total amount of both credits statewide is capped at $4 million annually, with completed applications considered on a first-come, first-served basis. To qualify, journalists must reside within 50 miles of their assigned coverage area and work as journalists for at least 25% of the taxable year. Local news organizations must meet specific criteria, including regularly publishing state or local news, maintaining transparency in ownership, and limiting revenue from political action committees or certain tax-exempt organizations. SB 110 requires that these tax credits be included in the state’s tax expenditure budget. The bill takes effect for taxable years beginning on or after January 1, 2025, and sunsets on January 1, 2030.

Fiscal Implications

Senate Bill 110 (SB 110) establishes an annual cap of $4 million on the combined amount of Local Journalist Employment Income Tax Credits and Local Journalist Employment Corporate Income Tax Credits that may be certified statewide. This represents the maximum potential reduction in General Fund revenue per year if the credits are fully utilized. The refundable nature of these credits ensures that taxpayers whose credit amounts exceed their tax liability will receive the excess amount as a refund, which could further impact state revenues.

The Taxation and Revenue Department (TRD) will be required to implement application and certification processes to administer the tax credits. This will involve developing new forms, creating administrative procedures, and ensuring compliance with the bill’s requirements. Although these administrative costs are not explicitly addressed in the bill, TRD will likely need to absorb these expenses within its current budget or seek additional appropriations. SB 110 also mandates the inclusion of these tax credits in the state’s tax expenditure budget, which will require TRD to report annually on the fiscal impact and effectiveness of the program. 

Current Law:

 Under current law, there are no tax credits specifically designed to support local journalism or encourage local news organizations to hire journalists. The Income Tax Act and Corporate Income and Franchise Tax Act do not currently include provisions that provide tax relief for wages paid to journalists or for promoting state or local news production. Furthermore, existing statutes do not establish application processes, eligibility criteria, or caps on funding for journalism-related tax benefits. As a result, local news organizations and their employees do not receive targeted tax incentives under current law.