California bill would tax Big Tech to create tax credit for news organizations

Should Big Tech be taxed to pay for more California journalists?

A California lawmaker has introduced a bill that would levy a “data extraction mitigation fee” on companies such as Google and Meta in order to provide media outlets in the state with a tax credit meant to pay for more journalists.

Senate Bill 1327, by Sen. Steve Glazer, D-Contra Costa, would raise around $500 million annually to be split among California news outlets, depending on their size and whether they offer employee health and retirement benefits.

Glazer likened the rise of the tech giants to a new Gold Rush — but instead of gold, these companies harvest massive amounts of data against which they can sell ads. This has come, Glazer said, at the expense of the news industry, much of which is heavily reliant on ad revenue.

“In my opinion, the platforms need to mitigate this damage, and this new bill that we’re introducing today will do exactly that,” Glazer said. California, Glazer said, already imposes “mitigation fees” on other companies, such as those that put chemicals in the environment and developers who burden state roads and schools.

Glazer’s fee would impose the statewide sales and use tax rate of 7.25% on all online ad revenue above $2.5 billion. The base tax credit for news organizations with 10 or more employees would be 25% of the wages paid, and more if the company offers health and retirement benefits. News organizations with fewer than 10 employees would get a credit equal to 35% of wages paid, Glazer said.

News outlets that hire new reporters would get an even larger credit under the proposed law. Glazer said that a journalist at a small publication making $60,000 a year would generate a tax credit of $24,000.

However, the bill limits that tax credit to journalists who live within 50 miles of the community they serve; it would exclude journalists who work remotely or work in bureaus outside that community, such as a Sacramento or Washington, D.C., bureau.

The bill sits in the Senate Revenue and Taxation Committee, which Glazer chairs. There is no hearing scheduled.

Representatives from Google did not respond by deadline to The Bee’s request for comment. A representative for Meta said the company has no comment at this time. The Bee also reached out to tech industry trade groups, including the Chamber of Progress and Technet, for comment, but did not receive responses.

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