Personal Income Tax Law and Corporation Tax Law: credits: local news organizations: business expense deduction: excessive employee remuneration.
AB 2222
California Bills
20250AB__222293AMD INTRODUCED 2026-02-19 AMENDED_ASSEMBLY 2026-03-09 AMENDED_ASSEMBLY 2026-04-22 AMENDED_ASSEMBLY 2026-05-21 AMENDED_ASSEMBLY 2026-05-22 AMENDED_SENATE 2026-06-17 AMENDED_SENATE 2026-06-29 2025 AB AMD Introduced by Assembly Members Ward and Wicks (Coauthors: Assembly Members Lowenthal and McKinnor) (Coauthor: Senator McNerney) LEAD_AUTHOR ASSEMBLY Ward LEAD_AUTHOR ASSEMBLY Wicks COAUTHOR ASSEMBLY Lowenthal COAUTHOR ASSEMBLY McKinnor COAUTHOR SENATE McNerney
An act to amend Sections 17271, 23036, and of, and to add and repeal Sections 17053.76 and of, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor. taxation, and making an appropriation therefor Personal Income Tax Law and Corporation Tax Law: credits: local news organizations: business expense deduction: excessive employee remuneration.
(1) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including a credit for specified new hiring and employment. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account. Existing law also establishes the continuously appropriated Corporation Tax Fund in the State Treasury for the purpose of making refunds pursuant to existing law.
This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, allow a credit against those taxes to a qualified taxpayer, as defined, equal to $20,000 for each qualifying journalist, as defined, continuously employed on a full-time basis by the taxpayer, not to exceed qualifying journalists. The bill would also allow a credit of $15,000 for each qualifying journalist continuously employed on a full-time basis by the taxpayer in excess of qualifying journalists, and a credit of $7,500 for each qualifying journalist employed on a part-time basis by the taxpayer.
The bill would allow an additional credit of $15,000 for each qualifying journalist employed on a full-time basis in a new journalism position, as defined. The bill would require the amount of the credit exceeding the taxpayer’s liability to be credited against other amounts due, if any, and would require the balance to be paid from the Tax Relief and Refund Account or the Corporation Tax Fund, as specified, and refunded to the taxpayer. By increasing the payments from the Tax Relief and Refund Account and the Corporation Tax Fund, which are continuously appropriated funds, the bill would make an appropriation.
Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals that the tax credit will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure.
The bill would also require the Franchise Tax Board to publish a report on its internet website detailing the total number of taxpayers allowed the credit, the total dollar value of credits allowed, and the average dollar amount per qualified taxpayer allowed a credit. The bill would require the Franchise Tax Board to submit a report to the Legislature providing guidance on potential administration and enforcement of a refundable tax credit for organizations exempt from federal income tax, as provided.
(2) Under the Personal Income Tax Law and the Corporation Tax Law, various provisions of the federal Internal Revenue Code, as enacted as of a specified date, are referenced in various sections of the Revenue and Taxation Code. Those laws provide that, for taxable years beginning on or after January 1, 2025, the specified date of those referenced Internal Revenue Code sections is January 1, 2025, unless otherwise specifically provided.
The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal income tax laws, allow various deductions from gross income in calculating adjusted gross income, including a deduction for the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. Existing law does not allow a deduction as an ordinary and necessary business expense for the wages or other remuneration of a covered employee, as defined, to the extent that remuneration exceeds $1,000,000.
Existing federal income tax law, enacted after January 1, 2025, amends the application of the limitations relating to covered employees in the case of taxpayers that are members of a controlled group. This bill would specifically conform to the federal application of the limitations relating to covered employees in the case of taxpayers that are members of a controlled group for state tax purposes. The bill would also further conform to the federal definition of a covered employee. TWO_THIRDS YES YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:
SECTION
Section 17053.76 is added to the Revenue and Taxation Code , to read: 17053.76. (
a) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, there shall be allowed a credit against the “net tax,” as defined in
Section 17039, to a qualified taxpayer an amount equal to the sum of the following:
(1) Twenty thousand dollars ($20,000) for each qualifying journalist continuously employed on a full-time basis by the qualified taxpayer, not to exceed five qualifying journalists.
(2) Fifteen thousand dollars ($15,000) for each qualifying journalist continuously employed on a full-time basis in excess of five employed by the qualified taxpayer.
(3) An additional fifteen thousand dollars ($15,000) for each qualifying journalist employed on a full-time basis in a new journalism position.
(4) An additional seven thousand five hundred dollars ($7,500) for each qualifying journalist employed on a part-time basis by the qualified taxpayer. (
b) For purposes of this section, the following
definitions shall apply: (1) “Continuously employed” means the journalist was employed by the qualified taxpayer, or by a qualified taxpayer of the same combined reporting group as the qualified taxpayer, in both of the following: (
A) The preceding taxable year on a full-time basis. (
B) The taxable year in which this credit is claimed. (2) “Local news outlet” means a qualifying digital news outlet, qualifying broadcast station, or qualifying print publication that produces original news coverage concerning local communities in the state. (1)</xhtml:p>"?> (3) “New journalism position” means the difference, but not below zero, of the value calculated in subparagraph (
A) less the value calculated in subparagraph (B). (
A) The average number of qualifying journalists employed by the qualified taxpayer, or by any trade or business acquired by the qualified taxpayer during the taxable year, per day during the taxable year, rounded to the nearest whole number. (
B) The average number of qualifying journalists employed by the qualified taxpayer, or by any trade or business acquired by the qualified taxpayer during the taxable year, per day during the prior taxable year, rounded to the nearest whole number. (4) “On a full-time basis” means employed by, or is the sole proprietor of, a qualified taxpayer on a full-time basis of at least hours per week for more than weeks, with annualized wages, salary, or passthrough income of no less than thirty-five thousand dollars ($35,000) during the taxable year. (5) “On a part-time basis” means employed by a qualified taxpayer for at least hours per week but less than hours per week for more than weeks, with annualized wages or salary of no less than twenty-five thousand dollars ($25,000) during the taxable year. (2)</xhtml:p>"?> (6) “Qualified taxpayer” means a person or entity engaged in a trade or business within California that owns or operates a local news organization that satisfies all of the following: (
A) Is organized in this state, or legally registered to conduct business within this state, for at least months prior to the start of the taxable year. (
B) Publicly discloses all of its beneficial owners, or its board of directors if the taxpayer is a nonprofit entity, on its internet website or in its publication. (
C) Carries active media liability insurance coverage continuously for the taxable year. (
D) Maintains and publicly displays an editorial policy for error correction and clarification that includes an accessible process for reporting errors and complaints. (
E) Is not controlled, directly or indirectly through one or more intermediaries, by a disqualified organization. For purposes of this subparagraph, a “disqualified organization” is either of the following: (
i) A political action committee or other entity described in
Section of the Internal Revenue Code. (ii) An organization that is exempt from federal income taxation pursuant to
Section 501(c)(4) of the Internal Revenue Code. (3)</xhtml:p>"?> (7) “Qualifying broadcast station” means a broadcast station that satisfies either of the following: (
A) Is licensed to a community of license located within the state by the Federal Communications Commission pursuant to
Section of Title of the United States Code. (
B) Is a nonprofit organization exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code and satisfies either of the following: (
i) Received a community service grant from the Corporation for Public Broadcasting prior to the 2025–26 fiscal year. (ii) Employs qualifying journalists on behalf of a university-licensed public broadcaster. (4)</xhtml:p>"?> (8) “Qualifying digital news outlet” means an entity that publishes news and information about the state or a local community within the state at least monthly during the taxable year and can demonstrate, with data on digital subscribers or traffic, to have at least percent of its audience located within the state during the taxable year. (5)</xhtml:p>"?> (9) “Qualifying journalist” means an individual that satisfies both of the following: (A)<xhtml:span class="EnSpace"/>Is employed by, or is the sole proprietor of, a qualified taxpayer on a full-time basis of at least hours per week for more than weeks with annualized wages, salary, or passthrough income of no less than thirty-five thousand dollars ($35,000) during the taxable year.</xhtml:p>"?> (B)</xhtml:p>"?> (
A) Has primary job duties that occur in the state and consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news for dissemination to the local community, including roles such as reporter, correspondent, photographer, videographer, editor, and digital producer. (C)<xhtml:span class="EnSpace"/>Resides within the state.</xhtml:p><xhtml:p>(6)<xhtml:span class="EnSpace"/>“Qualifying part-time journalist” means an individual that satisfies all of the following:</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>Is employed by a qualified taxpayer on a part-time basis of at least hours per week but less than hours per week for more than weeks, with annualized wages or salary of no less than twenty-five thousand dollars ($25,000) during the taxable year.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Has primary job duties that occur in the state and consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news for dissemination to the local community, including roles such as reporter, correspondent, photographer, videographer, editor, and digital producer.</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Resides within the state. </xhtml:p>"?> (
B) Is a resident of this state, as defined in
Section 17014. (7)</xhtml:p>"?> (10) “Qualifying print publication” means either of the following: (
A) A local newspaper or news magazine publisher with periodicals mailing privileges from the United States Postal Service that publishes at least monthly during the taxable year and either maintains its known office of publication for the original entry for periodicals mailing privileges within the state or can demonstrate that at least percent of its print distribution is to locations within the state during the taxable year. (
B) A newspaper of general circulation adjudicated by a California court, as described in
Section of the Government Code. (
c) If the amount allowable as a credit under this
section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the taxpayer. (
d) The credit allowed by this
section shall not reduce the “net tax” below the tentative minimum tax, as defined by
Section 17062. (
e) The credit allowed by this
section shall be in lieu of any other credit allowed pursuant to this
part in relation to the hiring or employment of any qualifying journalist or qualifying part-time journalist. (f)
(1) For purposes of complying with
Section as it relates to the credits allowed by this
section and
Section 23633, the Legislature finds and declares the following: (
A) The United States is estimated to have lost percent of its local journalists since 2002, and the goal of the credits is to provide financial relief to local news media outlets that are struggling to maintain or grow local journalist employment. (
B) The performance indicators for the Legislature to use in determining whether the credits are achieving the stated goal shall be the total number of taxpayers allowed the credit, the total dollar value of credits allowed, and the average dollar amount per qualified taxpayer allowed a credit pursuant to this
section and
Section 23633. (2) (A) (
i) No later than April 1, 2029, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with
Section of the Government Code, detailing the total number of taxpayers allowed the credit, the total dollar value of credits allowed, and the average dollar amount per qualified taxpayer allowed a credit pursuant to this
section and
Section 23633. (B)</xhtml:p>"?> (ii) The Franchise Tax Board shall publish a version of the report described in subparagraph (
A) on their internet website, while ensuring that any proprietary financial information regarding the operation of qualified taxpayers remains confidential. (
B) In addition to the report required pursuant to subparagraph (A), the Franchise Tax Board shall submit a report to the Legislature, in compliance with
Section of the Government Code, providing guidance on potential administration and enforcement of a refundable tax credit for organizations exempt from federal income tax pursuant to
Section 501(c)(3) of the Internal Revenue Code. (
C) The disclosure requirements of subparagraph (
A) shall be treated as an exception to
Section 19542. (
g) This
section shall remain operative only until December 1, 2032, and as of that date is repealed.
SEC. 2.
Section of the Revenue and Taxation Code is amended to read: 17271. (
a) The amendments made to
Section 162(
m) of the Internal Revenue Code by
Section 13601(e)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to exception for binding contracts, shall apply, and is modified by substituting “March 31, 2019” for “November 2, 2017.” (
b) Section 162(m)(3)(
C) of the Internal Revenue Code, relating to covered employee, shall apply.
SEC. 3.
Section of the Revenue and Taxation Code is amended to read: 23036. (a)
(1) The term “tax” includes any of the following: (
A) The tax imposed under
Chapter 2 (commencing with
Section 23101). (
B) The tax imposed under
Chapter 3 (commencing with
Section 23501). (
C) The tax on unrelated business taxable income, imposed under
Section 23731. (
D) The tax on “S” corporations imposed under
Section 23802.
(2) The term “tax” does not include any amount imposed under paragraph (1) of subdivision (
e) of
Section or paragraph (2) of subdivision (
f) of
Section 24667. (
b) For purposes of
Article 5 (commencing with
Section 18661) of
Chapter 2,
Article 3 (commencing with
Section 19031) of
Chapter 4,
Article 6 (commencing with
Section 19101) of
Chapter 4, and
Chapter 7 (commencing with
Section 19501) of
Part 10.2, and, for purposes of Sections 18601, 19001, and 19005, the term “tax” also includes all of the following:
(1) The tax on limited partnerships, imposed under
Section 17935, the tax on limited liability companies, imposed under
Section 17941, and the tax on registered limited liability partnerships and foreign limited liability partnerships imposed under
Section 17948.
(2) The alternative minimum tax imposed under
Chapter 2.5 (commencing with
Section 23400).
(3) The tax on built-in gains of “S” corporations, imposed under
Section 23809.
(4) The tax on excess passive investment income of “S” corporations, imposed under
Section 23811. (
c) Notwithstanding any other provision of this part, credits are allowed against the “tax” in the following order:
(1) Credits that do not contain carryover provisions.
(2) Credits that, when the credit exceeds the “tax,” allow the excess to be carried over to offset the “tax” in succeeding taxable years, except for those credits that are allowed to reduce the “tax” below the tentative minimum tax, as defined by
Section 23455. The order of credits within this paragraph shall be determined by the Franchise Tax Board.
(3) The minimum tax credit allowed by
Section 23453.
(4) Credits that are allowed to reduce the “tax” below the tentative minimum tax, as defined by
Section 23455, except the credit described in paragraph (5).
(5) For taxable years beginning on or after January 1, 2025, the credit allowed by
Section 23698.1.
(6) For taxable years beginning on or after January 1, 2027, the credit allowed by
Section 23036.5.
(7) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, the credit allowed by
Section 23633.
(8) Credits for taxes withheld under
Section 18662. (
d) Notwithstanding any other provision of this part, each of the following applies:
(1) A credit may not reduce the “tax” below the tentative minimum tax (as defined by paragraph (1) of subdivision (
a) of
Section 23455), except the following credits: (
A) The credit allowed by former
Section 23601 (relating to solar energy). (
B) The credit allowed by former
Section 23601.4 (relating to solar energy). (
C) The credit allowed by former
Section 23601.5 (relating to solar energy). (
D) The credit allowed by
Section 23609 (relating to research expenditures). (
E) The credit allowed by former
Section 23609.5 (relating to clinical testing expenses). (
F) The credit allowed by
Section 23610.5 (relating to low-income housing). (
G) The credit allowed by former
Section 23612 (relating to sales and use tax credit). (
H) The credit allowed by
Section 23612.2 (relating to enterprise zone sales or use tax credit). (
I) The credit allowed by former
Section 23612.6 (relating to Los Angeles Revitalization Zone sales tax credit). (
J) The credit allowed by former
Section 23622 (relating to enterprise zone hiring credit). (
K) The credit allowed by
Section 23622.7 (relating to enterprise zone hiring credit). (
L) The credit allowed by former
Section 23623 (relating to program area hiring credit). (
M) The credit allowed by former
Section 23623.5 (relating to Los Angeles Revitalization Zone hiring credit). (
N) The credit allowed by former
Section 23625 (relating to Los Angeles Revitalization Zone hiring credit). (
O) The credit allowed by
Section 23633 (relating to targeted tax area sales or use tax credit). (
P) The credit allowed by
Section 23634 (relating to targeted tax area hiring credit). (
Q) The credit allowed by former
Section 23649 (relating to qualified property). (
R) For taxable years beginning on or after January 1, 2011, the credit allowed by
Section 23685 (relating to qualified motion pictures). (
S) For taxable years beginning on or after January 1, 2014, the credit allowed by
Section 23689 (relating to GO-Biz California Competes Credit). (
T) For taxable years beginning on or after January 1, 2016, the credit allowed by
Section 23695 (relating to qualified motion pictures). (
U) For taxable years beginning on or after January 1, 2014, the credit allowed by
Section 23686 (relating to the College Access Tax Credit Fund). (
V) For taxable years beginning on or after January 1, 2017, the credit allowed by
Section 23687 (relating to the College Access Tax Credit Fund). (
W) For taxable years beginning on or after January 1, 2020, and before January 1, 2031, the credit allowed by
Section 23636 (relating to the new advanced strategic aircraft credit). (
X) For taxable years beginning on or after January 1, 2020, the credit allowed by
Section 23698 (relating to the California Motion Picture and Television Production Credit). (
Y) For taxable years beginning on or after January 1, 2025, the credit allowed by
Section 23698.1 (relating to the California Motion Picture and Television Production Credit). (
Z) For taxable years beginning on or after January 1, 2027, the credit allowed by
Section 23036.5. (AA) For taxable years beginning on or after January 1, 2026, and before January 1, 2036, the credit allowed by
Section 23640 (relating to eligible transmission projects).
(2) A credit against the tax may not reduce the minimum franchise tax imposed under
Chapter 2 (commencing with
Section 23101). (
e) Any credit which is partially or totally denied under subdivision (
d) is allowed to be carried over to reduce the “tax” in the following year, and succeeding years if necessary, if the provisions relating to that credit include a provision to allow a carryover of the unused portion of that credit. (
f) Unless otherwise provided, any remaining carryover from a credit that has been repealed or made inoperative is allowed to be carried over under the provisions of that
section as it read immediately prior to being repealed or becoming inoperative. (
g) Unless otherwise provided, if two or more taxpayers share in costs that would be eligible for a tax credit allowed under this part, each taxpayer is eligible to receive the tax credit in proportion to their respective share of the costs paid or incurred. (
h) Unless otherwise provided, in the case of an “S” corporation, any credit allowed by this
part is computed at the “S” corporation level, and any limitation on the expenses qualifying for the credit or limitation upon the amount of the credit applies to the “S” corporation and to each shareholder. (i)
(1) With respect to any taxpayer that directly or indirectly owns an interest in a business entity that is disregarded for tax purposes pursuant to
Section and any regulations thereunder, the amount of any credit or credit carryforward allowable for any taxable year attributable to the disregarded business entity is limited in accordance with paragraphs (2) and (3).
(2) The amount of any credit otherwise allowed under this part, including any credit carryover from prior years, that may be applied to reduce the taxpayer’s “tax,” as defined in subdivision (a), for the taxable year is limited to an amount equal to the excess of the taxpayer’s regular tax (as defined in
Section 23455), determined by including income attributable to the disregarded business entity that generated the credit or credit carryover, over the taxpayer’s regular tax (as defined in
Section 23455), determined by excluding the income attributable to that disregarded business entity. A credit is not allowed if the taxpayer’s regular tax (as defined in
Section 23455), determined by including the income attributable to the disregarded business entity is less than the taxpayer’s regular tax (as defined in
Section 23455), determined by excluding the income attributable to the disregarded business entity.
(3) If the amount of a credit allowed pursuant to the
section establishing the credit exceeds the amount allowable under this subdivision in any taxable year, the excess amount may be carried over to subsequent taxable years pursuant to subdivisions (d), (e), and (f). (j)
(1) Unless otherwise specifically provided, in the case of a taxpayer that is a partner or shareholder of an eligible pass-thru entity described in paragraph (2), any credit passed through to the taxpayer in the taxpayer’s first taxable year beginning on or after the date the credit is no longer operative may be claimed by the taxpayer in that taxable year, notwithstanding the repeal of the statute authorizing the credit prior to the close of that taxable year.
(2) For purposes of this subdivision, “eligible pass-thru entity” means any partnership or “S” corporation that files its return on a fiscal year basis pursuant to
Section 18566, and that is entitled to a credit pursuant to this part for the taxable year that begins during the last year a credit is operative.
(3) This subdivision applies to credits that become inoperative on or after the operative date of the act adding this subdivision. (
k) The amendments made to this
section by
Chapter of the Statutes of shall apply as follows:
(1) The amendments to subdivision (
c) shall be operative for taxable years beginning on or after January 1, 2025.
(2) The amendments to subparagraph (
X) of paragraph (1) of subdivision (
d) shall be operative for taxable years beginning on or after January 1, 2020.
(3) The amendments to subparagraph (
Y) of paragraph (1) of subdivision (
d) shall be operative for taxable years beginning on or after January 1, 2025.
SEC. 4.
Section is added to the Revenue and Taxation Code , to read: 23633. (
a) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, there shall be allowed a credit against the “tax,” as defined in
Section 23036, to a qualified taxpayer an amount equal to the sum of the following:
(1) Twenty thousand dollars ($20,000) for each qualifying journalist continuously employed on a full-time basis by the qualified taxpayer, not to exceed five qualifying journalists.
(2) Fifteen thousand dollars ($15,000) for each qualifying journalist continuously employed on a full-time basis in excess of five employed by the qualified taxpayer.
(3) An additional fifteen thousand dollars ($15,000) for each qualifying journalist employed on a full-time basis in a new journalism position.
(4) An additional seven thousand five hundred dollars ($7,500) for each qualifying journalist employed on a part-time basis by the qualified taxpayer. (
b) For purposes of this section, the following
definitions shall apply: (1) “Continuously employed” means the journalist was employed by the qualified taxpayer, or by a qualified taxpayer of the same combined reporting group as the qualified taxpayer, in both of the following: (
A) The preceding taxable year on a full-time basis. (
B) The taxable year in which this credit is claimed. (2) “Local news outlet” means a qualifying digital news outlet, qualifying broadcast station, or qualifying print publication that produces original news coverage concerning local communities in the state. (1)</xhtml:p>"?> (3) “New journalism position” means the difference, but not below zero, of the value calculated in subparagraph (
A) less the value calculated in subparagraph (B). (
A) The average number of qualifying journalists employed by the qualified taxpayer, or by any trade or business acquired by the qualified taxpayer during the taxable year, per day during the taxable year, rounded to the nearest whole number. (
B) The average number of qualifying journalists employed by the qualified taxpayer, or by any trade or business acquired by the qualified taxpayer during the taxable year, per day during the prior taxable year, rounded to the nearest whole number. (4) “On a full-time basis” means employed by, or is the sole proprietor of, a qualified taxpayer on a full-time basis of at least hours per week for more than weeks, with annualized wages, salary, or passthrough income of no less than thirty-five thousand dollars ($35,000) during the taxable year. (5) “On a part-time basis” means employed by a qualified taxpayer for at least hours per week but less than hours per week for more than weeks, with annualized wages or salary of no less than twenty-five thousand dollars ($25,000) during the taxable year. (2)</xhtml:p>"?> (6) “Qualified taxpayer” means a person or entity engaged in a trade or business within California that owns or operates local news organization that satisfies all of the following: (
A) Is organized in this state, or legally registered to conduct business within this state, for at least months prior to the start of the taxable year. (
B) Publicly discloses all of its beneficial owners, or its board of directors if the taxpayer is a nonprofit entity, on its internet website or in its publication. (
C) Carries active media liability insurance coverage continuously for the taxable year. (
D) Maintains and publicly displays an editorial policy for error correction and clarification that includes an accessible process for reporting errors and complaints. (
E) Is not controlled, directly or indirectly through one or more intermediaries, by a disqualified organization. For purposes of this subparagraph, a “disqualified organization” is either of the following: (
i) A political action committee or other entity described in
Section of the Internal Revenue Code. (ii) An organization that is exempt from federal income taxation pursuant to
Section 501(c)(4) of the Internal Revenue Code. (3)</xhtml:p>"?> (7) “Qualifying broadcast station” means a broadcast station that satisfies either of the following: (
A) Is licensed to a community of license located within the state by the Federal Communications Commission pursuant to
Section of Title of the United States Code. (
B) Is a nonprofit organization exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code and satisfies either of the following: (
i) Received a community service grant from the Corporation for Public Broadcasting prior to the 2025–26 fiscal year. (ii) Employs qualifying journalists on behalf of a university-licensed public broadcaster. (4)</xhtml:p>"?> (8) “Qualifying digital news outlet” means an entity that publishes news and information about the state or a local community within the state at least monthly during the taxable year and can demonstrate, with data on digital subscribers or traffic, to have at least percent of its audience located within the state during the taxable year. (5)</xhtml:p>"?> (9) “Qualifying journalist” means an individual that satisfies both of the following: (A)<xhtml:span class="EnSpace"/>Is employed by, or is the sole proprietor of, a qualified taxpayer on a full-time basis of at least hours per week for more than weeks with annualized wages, salary, or passthrough income of no less than thirty-five thousand dollars ($35,000) during the taxable year.</xhtml:p>"?> (B)</xhtml:p>"?> (
A) Has primary job duties that consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news for dissemination to the local community, including roles such as reporter, correspondent, photographer, videographer, editor, and digital producer. (C)<xhtml:span class="EnSpace"/>Resides within the state.</xhtml:p><xhtml:p>(6)<xhtml:span class="EnSpace"/>“Qualifying part-time journalist” means an individual that satisfies all of the following:</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>Is employed by a qualified taxpayer on a part-time basis of at least hours per week but less than hours per week for more than weeks, with annualized wages or salary of no less than twenty-five thousand dollars ($25,000) during the taxable year.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Has primary job duties that occur in the state and consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news for dissemination to the local community, including roles such as reporter, correspondent, photographer, videographer, editor, and digital producer.</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Resides within the state.</xhtml:p>"?> (
B) Is a resident of this state, as defined in
Section 17014. (7)</xhtml:p>"?> (10) “Qualifying print publication” means either of the following: (
A) A local newspaper or news magazine publisher with periodicals mailing privileges from the United States Postal Service that publishes at least monthly during the taxable year and either maintains its known office of publication for the original entry for periodicals mailing privileges within the state or can demonstrate that at least percent of its print distribution is to locations within the state during the taxable year. (
B) A newspaper of general circulation adjudicated by a California court, as described in
Section of the Government Code. (
c) If the amount allowable as a credit under this
section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Corporation Tax Fund and refunded to the taxpayer. (
d) The credit allowed by this
section shall not reduce the “tax” below the tentative minimum tax, as defined by paragraph (1) of subdivision (
a) of
Section 23455, or below the minimum franchise tax imposed under
Section 23153. (
e) The credit allowed by this
section shall be in lieu of any other credit allowed pursuant to this
part in relation to the hiring or employment of any qualifying journalist. (
f) This
section shall remain operative only until December 1, 2032, and as of that date is repealed.
SEC. 5.
Section of the Revenue and Taxation Code is amended to read: 24343. (
a) Section of the Internal Revenue Code, relating to trade or business expenses, shall apply, except as otherwise provided. (
b) For purposes of applying
Section of the Internal Revenue Code, any references to
Section of the Internal Revenue Code shall be modified to refer to Sections to 24359.1, inclusive, of this part. (c)
(1) The amendments made by
Section 13601(a), (b), (c), and (
d) of the Tax Cuts and Jobs Act (Public Law 115-97) to
Section 162(
m) of the Internal Revenue Code, relating to certain excessive employee remuneration, shall apply, except as otherwise provided.
(2) The amendments made by
Section of federal H.R. 1, also known as the One Big Beautiful Bill Act (Public Law 119-21), to
Section 162(
m) of the Internal Revenue Code, relating to excessive employee remuneration from controlled group members and allocation of deduction, shall apply, except as otherwise provided.
(3) The amendments made by
Section 13601(e)(2) of the Tax Cuts and Jobs Act (Public Law 115-97), relating to exception for binding contracts, shall apply, and is modified by substituting “March 31, 2019” for “November 2, 2017.”