Impact Funda! California Legislates Big Tech Tax for News Industry Support

Impact Funda! California Legislates Big Tech Tax for News Industry Support

On Thursday, the California state Senate approved legislation that would boost the journalism business by levying a new tax on some of the largest digital corporations globally.

Senate Bill 1327 would impose taxes on Amazon, Meta, and Google for the user data they gather. The proceeds from this “data extraction mitigation fee” would be used to fund news organizations by providing them with a tax credit in exchange for hiring full-time journalists.

Sen. Steve Glazer (D-Orinda) introduced the bill on the Senate floor, framing it as a step to defend democracy and a free press. “Just as we have funded a movie industry tax credit, with no state involvement in content, the same goes for this journalism tax credit,” Glazer said.

The week it was passed, lawmakers also advanced another bill aimed at reviving the local news industry, which has been hurting from falling income due to changes in how people consume news due to technology. Digital platforms would have to pay news organizations a fee when they sell advertisements alongside news material under Assembly Bill 886.

Impact Funda! California Legislates Big Tech Tax for News Industry Support

In addition to stating that his bill is intended to be a supplement to the other legislation, Assemblymember Buffy Wicks (D-Oakland) and Glazer stated they want to collaborate with the businesses that may be impacted by both laws “in balancing everyone’s interest.”


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Sen. Scott Wilk (R-Santa Clarita), a Republican, voted in favor of the proposal, which passed 27 to 7. It now moves to the Assembly after requiring the backing of two thirds of the Senate to pass as a tax increase.

A Republican who opposed the measure claimed that technological advancements are transforming not only journalism but many other businesses as well, and that some of these technologies have inspired creative new ways to consume news, such podcasts or nonprofit news sources.

Sen. Roger Niello (R-Fair Oaks) stated, “These are all new models, and very few people under the age of 50… even pick up a paper newspaper.” “So this is an evolution of the marketplace.”

The California Chamber of business, other local chambers of business, and trade groups for IT companies, such as Technet, Internet Coalition, and Chamber of Progress, are among those opposed to the plan.

The proprietors of numerous small newspapers, a coalition of nonprofit and online news sites, and unions that represent journalists are among the supporters.

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