Small business tax credit for local news advertising advances in Colorado House

Update: HB 22-1121 passed the House Finance Committee 6-5 on Monday, Mar. 21, and now heads to the House Appropriations Committee.

By Jeffrey A. Roberts
CFOIC Executive Director

A committee of state lawmakers Thursday endorsed a tax credit for small businesses that spend money to advertise in Colorado news outlets.

House Bill 22-1121, introduced by Democratic Rep. Lisa Cutter of Littleton, is designed to boost revenue for print, online and broadcast news organizations.

“This is one way we can help local media, and in the process, help our communities grow stronger,” Cutter told members of the House Business Affairs and Labor Committee, which voted 8-3 for the bill.

newspapers
(Credit: artisteer, iStock)

Under the measure, businesses with fewer than 50 employees could take a credit against their annual income taxes of up to $2,500. To qualify, they must advertise in news organizations that primarily serve the needs of Colorado communities and employ at least one journalist who lives and works in the state.

During the hearing, committee members heard all sorts of statistics about the long-term decline in the number of news organizations in Colorado and the number of journalists working in the state. But they also learned about groups such as the Colorado Media Project, the Colorado News Collaborative and the Colorado News Conservancy that are working to strengthen the state’s local news landscape.

“This is an evolving and innovative industry and it’s by no means failing,” said Linda Shapley, publisher of the 26 Colorado Community Media newspapers.

Tim Regan-Porter, CEO of the Colorado Press Association, said market studies show that 81 percent of Colorado adults read local newspapers and newspaper websites each month, “with 80 percent indicating the highest trust in these news websites and sources.”

“But despite this amazing degree of patronage from Coloradans, every day is a struggle for my members,” he said. “Facebook and Google have absorbed a large portion of national and local advertising … and then the pandemic hit. As readers depended even more on local news, advertising was the first thing to go. It’s returning, but slowly. This bill would be a big help in that recovery.”

Some legislators who expressed support for HB 22-1121 discussed how local journalism is vital for the health of communities and American democracy.

“The quality of public conversations, the quality of our problem solving — all  of that gets better when we’re drawn closer together, and I see media as being glue that helps bring us all back together,” said Rep. Shannon Bird, D-Westminster. “I really like this bill and think it’s a very elegant solution to many different challenges that need attention.”

Rep. Tom Sullivan, an Aurora Democrat, spoke emotionally about the numerous times he was interviewed by national news organizations following the death of his son Alex in the 2012 Aurora theater shooting.

“And through all of that, the people that have really understood and really get what happened that day — and how the people in my community were really impacted — has been the Aurora Sentinel,” Sullivan said. “And that’s because they’re right down the street. They drive by that theater every day. They live with the people who are surviving that day.”

“And if they weren’t around,” he added, “people wouldn’t understand what we go through each and every day. So it is imperative that our local journalists and our local publications have the ability to continue to tell the stories of the people in their communities who are impacted by the day-to-day things that happen.”

Rep. Terri Carver, a Colorado Springs Republican, said she agrees local news organizations are “essential to the functioning of our civil society” but thinks the definition of news organizations in the measure is written too broadly. “I don’t quite understand why there’s not something in there about the majority of the employees residing in Colorado,” she said. “… You could have just one journalist living in Colorado, and as long as they’re reporting somewhat on Colorado news, this tax credit would kick in.”

HB 22-1121 now heads to the House Finance Committee because of its impact on state General Fund revenue, estimated to be $8.8 million in tax year 2023.

Follow the Colorado Freedom of Information Coalition on Twitter @CoFOIC. Like CFOIC’s Facebook page. Visit CFOIC’s legislature page to track bills in the General Assembly that could affect the flow or availability of information in Colorado.

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