Last year, New York became the first state to incentivize the hiring and retention of local journalists, enacting a $30 million, three-year proposal that will provide payroll tax credits to local media outlets such as radio for employing journalists. Now, state lawmakers are debating another proposal that would encourage local businesses to buy ads from local publications.
State Senator Monica Martinez and Assemblymember Jen Lunsford have introduced the Lift Our Communities Advertise Locally, or LOCAL Act (Senate Bill No. 1865), which will establish a three-year tax credit program. If passed, eligible small businesses will be able to claim a credit for a significant portion of their local media advertising spending.
“Small businesses are centers of our communities, built upon relationships with neighbors,” Martinez said. “The LOCAL Act will strengthen those ties by making it easier to connect with local customers via trusted media that is deeply embedded in the communities they serve.
This legislation encourages a cycle of growth by allowing small businesses to expand their reach while also investing in media outlets that keep New Yorkers informed and engaged.”
Under the LOCAL Act, any business with ten or fewer employees is eligible for a refundable tax credit equal to 80% of its first $5,000 in local advertising, up to a maximum credit of $4,000 per year.
The state would allow for a total of $10 million in credits annually. According to the bill, 60% of the credits must go to businesses owned by women, minorities, and disabled veterans.
“By providing small businesses with the tools to connect with their neighbors and supporting the local journalism that keeps us informed, this legislation strengthens the foundation of our local economies,” according to Lunsford.
The bill has the support of several business trade groups, including the Empire State Local News Coalition, which represents over 200 local New York newspapers and sees the legislation as a way to boost investment in local small businesses while also ensuring the sustainability of local news organizations.
Other supporters include the Empire State Local News Coalition, the Rebuild Local News Coalition, the Long Island Association, the Long Island African American Chamber of Commerce, Upstate United, and the National Federation of Independent Businesses.
Similar tax credits for advertising spending have been proposed at the federal level, but none of the proposed legislation has been advanced by Congress.
When New York enacted a proposal last year to provide a payroll tax credit to local news outlets, including local radio and television stations, to incentivize media outlets to hire more reporters, it became the first state in the country to do so.
The payroll tax benefit entitles each eligible broadcast business and newspaper to a 50% refundable tax credit on the first $50,000 of an existing employee’s salary, up to a maximum of $300,000 per business. Beginning with the 2025 tax year, New York will spend $30 million annually for the next three years.
The plan also includes a $4 million annual incentive for print and broadcast businesses to hire new journalists. To qualify, those reporters would have to work at least 30 hours per week and live in the broadcast market.