Attorney General’s legislation provides Washington newspapers with a tax break
OLYMPIA — Attorney General Bob Ferguson announced today that he is partnering with Sen. Mark Mullet, D-Issaquah, and Rep. Gerry Pollet, D- Seattle, to propose a bill in the next legislative session to exempt Washington newspapers and eligible online news outlets from the state business and occupation tax.
Newspapers currently pay a reduced B&O tax rate, but that preferential tax rate expires in July of 2024. Consistent with the Legislative Auditor’s recommendation, Senate Bill 5199/House Bill 1206 expands the preference to fully eliminate the B&O tax for newspaper publishers and printers. This legislation also extends the same rate to exclusively online news outlets that provide a similar public benefit as printed papers.
Attorney General Ferguson is proposing this legislation as part of hisongoing commitment to promote and defend democracy and combat polarization, misinformation, and extremism. A detailed report from the Washington League of Women Voters on the impacts of the loss of local journalism framed the harm this way: “Fewer people running for office and fewer people voting, less community engagement, increased political partisanship, and negative outcomes in public health and public finance.”
The proposal will have two benefits — save jobs and protect a critical community service. The legislation will reduce state revenues by an estimated $1 million per year.
“We don’t have to accept the loss of local news as an inevitability,” Ferguson said. “The time to act is now. This bill will save jobs — and help restore our democracy.”
“I’ve seen local newspapers and media in my district struggle over the past few years, and too many have already had to shut down,” Mullet said. “We have to help keep these outlets afloat. Local journalists play an essential role to inform the public, hold government accountable, and make our communities stronger. This bill will make a real difference.”
“Newspapers are vital to a healthy democracy and we have seen too many close and lay off employees,” said Pollet. “We can and should do everything we can to help preserve newsrooms across the state. Exempting them from the state B&O tax is an important step to support a robust free press.”
The bill will have its first hearing in the Senate Committee on Business, Financial Services, Gaming & Trade on Thursday at 10:30 a.m. It will stream live on TVW here.
Local news serves irreplaceable role
Local newspapers are responsible for half of our country’s original reporting, and only make up one-quarter of media outlets. In many rural communities, local news organizations provide the only information and updates about issues impacting the community.
Regional journalism is critical, as is journalism by and for Black, Indigenous, and people of color, including ethnic media organizations. These organizations are best positioned to identify, investigate, and report on issues of concern to their respective communities.
Increasingly, these roles are also being filled by online news outlets. Community-focused online digital publishers provide a vital service to geographically remote and ethnically diverse communities by producing timely, community-focused information in an accessible format.
B&O tax relief will protect jobs in an industry that has lost significant staffing
According to Pew Research Center, newsroom employment at newspapers nationwide fell by about 40,000 between 2008 and 2020. Employment at digital news organizations did increase during the same timeframe, but at a much slower rate.
Between 2005 and 2020, Washington state newspapers lost 67% of newsroom employees, according to a report from the U.S. Senate Committee on Commerce, Science and Transportation. The pandemic exacerbated the problem. According to data compiled by the Columbia Journalism Review, at least 43 newspapers in Washington laid off employees in 2020, and 23 suspended printing operations or reduced the number of days they offer a print newspaper.
Researchers at Northwestern University’s Medill School found that the country has lost more than a quarter of the newspapers that existed in 2005, and predicts that a third of those American newspapers will no longer exist by 2025.
Legislation includes eligible online news outlets
Ferguson, Mullet, and Pollet’s proposed legislation covers the digital publications of newspapers that publish a print publication. Recognizing the value of community-focused online publications, the tax break also applies to exclusively digital news outlets that meet certain criteria.
To be eligible, digital news outlets must meet all of the following criteria:
- The organization has at least two, but no more than 50 Washington employees, at least one of whom creates content for the publication.
- The organization’s primary business activity is creating and publishing eligible digital content.
- Content is published at regular intervals, at least once every three months.
- The outlet primarily features written content, and most of that content identifies the author or original source.
This is the first state-level proposal to include digital news outlets in efforts to save local news.