Report - 2023 01 26 A30527 D249424 Bill Report 5199 Sbr Bfgt Ta 23
- Issuer
- Congressional materials
- Document type
- Report
- Date
- 2023-01-26
- Case
- 2023 01 26 A30527 D249424 Bill Report 5199 Sbr Bfgt Ta 23
Summary
A Senate Bill Report on SB 5199, an act relating to tax relief for newspaper publishers, prepared by non-partisan staff of the Senate Committee on Business, Financial Services, Gaming & Trade, as of January 12, 2023. The bill is sponsored by Senators Mullet, Conway, Dozier and others, by request of the Attorney General. The report states that the bill would repeal the preferential business and occupation tax rate for publishing newspapers and, beginning January 1, 2024, allow a deduction for newspaper publishing and eligible digital content, defined in part as a publication with no more than 50 employees. It states that the preference expires on January 1, 2035 and directs the Joint Legislative Audit and Review Committee to perform a tax performance statement. The three-page report summarizes public testimony in support and lists those testifying.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Report - 2023 01 26 A30527 D249424 Bill Report 5199 Sbr Bfgt Ta 23.”
Original at app.leg.wa.gov, dated 2023-01-26. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-01-26-2023-01-26-a30527-d249424-bill-report-5199-sbr-bfgt-ta-23/
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SENATE BILL REPORT
SB 5199
As of January 12, 2023
Title: An act relating to tax relief for newspaper publishers.
Brief Description: Providing tax relief for newspaper publishers.
Sponsors: Senators Mullet, Conway, Dozier, Holy, Keiser, Lovelett, Nguyen, Shewmake and
Valdez; by request of Attorney General.
Brief History:
Committee Activity: Business, Financial Services, Gaming & Trade: 1/12/23.
Brief Summary of Bill
• Replaces the current preferential business & occupation (B&O) tax rate
of 0.035 percent for newspapers with a B&O tax deduction for business
activity engaging in newspaper publishing or certain digital content.
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE
Staff: Clinton McCarthy (786-7319)
Background: Business and Occupation Tax. Washington's major business tax is the
business and occupation (B&O) tax. The B&O tax is imposed on the gross receipts of
business activities conducted within the state, without any deduction for the costs of doing
business. Businesses must pay the B&O tax even though they may not have any profits or
may be operating at a loss. A taxpayer may have more than one B&O tax rate, depending
on the types of activities conducted. Major B&O tax rates are 0.471 percent for retailing;
0.484 percent for manufacturing, wholesaling, and extracting; and 1.5 percent for services
and for activities not classified elsewhere. Several preferential rates also apply to specific
business activities.
Business and Occupation Tax Preference for Newspapers. In 2008 and again in 2012, the
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
Senate Bill Report -1- SB 5199
Legislature temporarily revised the definition of newspaper to include electronic versions of
newspapers. The effect of this is that both the online version of a newspaper and the
physical version of a newspaper were taxed at the B&O rate of 0.35 percent until July 1,
2015. In 2015, the Legislature clarified that the electronic version of a newspaper is a
supplement to the printed newspaper, which creates a blended rate for reporting B&O taxes
for newspapers. The B&O rate of 0.35 percent was extended through July 1, 2024. After
this date the rate will be increased to 0.484 percent.
These businesses have to file a complete annual tax performance report with the
Department of Revenue. The current tax preference is set to expire July 1, 2024.
Summary of Bill: The preferential B&O tax rate of 0.35 percent for publishing
newspapers is repealed. Beginning January 1, 2024, businesses may deduct activities
related to printing or publishing a newspaper, or eligible digital content, or both, from their
B&O tax. A business claiming this preference must include the deductible amount in its
gross income reported on its excise tax return.
Eligible digital content is defined as a publication that:
• is published regularly and at least once every three months;
• has no more than 50 employees, at least one of whom creates content;
• primarily features written content; and
• is made available to readers primarily or exclusively in electronic format.
Eligible digital content does not include content created by a radio or television broadcaster.
The Joint Legislative Audit and Review Committee is directed to perform a tax
performance statement for this tax preference.
This tax preference expires on January 1, 2035.
Appropriation: None.
Fiscal Note: Requested on January 7, 2023.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill takes effect on January 1, 2024.
Staff Summary of Public Testimony: PRO: The local news industry is having a very
difficult time. The goal of the legislation is not to quintuple the size of the tax preference,
we are trying to assist these companies. The rate will go up if the preference does expire
next year, and we have to do something. Local journalism provides a unique and important
role in our communities. Fact based information on local issues are very important. There
has been a dramatic change in the last ten years. There are a lot more empty chairs than
Senate Bill Report -2- SB 5199
there used to be in newsrooms. Advocates want to bring the tax credit preference down to
zero, and this step recognizes the urgency of the industry. Everything we hold dear is
dependent on this industry. Local journalism is essential to our democracy, and it is
extremely expensive to produce. This bill will save tens of thousands of dollars for the
Columbian. The decline in advertising has led to the decline of many newspapers, such as
the Tacoma News Tribune. Local newspapers are vital to our communities. They publish
legal notices and let us know what is happening in our communities. Many communities
are losing their newspapers. There are a lot of news deserts across the country. When
newspapers go away, public participation goes way down. Employment is down over 30
percent over the years. No one covers any of the 17 school districts in Pierce County. No
journalist is assigned to the press corps. We've upset the entire applecart of Democracy by
allowing local journalism to go by the wayside. We should not tax something that is
struggling to survive. Journalism needs a boost anywhere it can.
OTHER: The League of Women Voters completed a study on how the decline of journalism
is having an impact on our democracy.
Persons Testifying: PRO: Senator Mark Mullet, Prime Sponsor; Ben Campbell, The
Columbian Publishing Company; Joanne Lisosky; John Lester, Publisher - Shelton-Mason
County Journal; Bob Ferguson, WA State Attorney General's Office; Joyce Bruce, WA
State Attorney General's Office; Don Nelson, Publisher, Methow Valley News; Andrew
Villeneuve, Northwest Progressive Institute; Carol Rikerd; Rowland Thompson, Allied
Daily Newspapers of Washington, Washington Newspaper Publishers Association; Scott
Hunter, The Star newspaper.
OTHER: Dee Anne Finken, League of Women Voters of WA.
Persons Signed In To Testify But Not Testifying: No one.
Senate Bill Report -3- SB 5199
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