Bill that would tax Big Tech to help California media advances in Senate — barely

A California bill to tax Big Tech companies to fund a tax credit for the news industry narrowly survived a Thursday Senate Appropriations Committee vote and will now proceed to the Senate floor for a full vote.

The committee voted 4-2 to discharge Senate Bill 1327, by Sen. Steve Glazer, D-Contra Costa, out of the suspense file, where bills with a notable fiscal impact go for consideration.

The bill, which would infuse $500 million annually into newsrooms in the state, passed only due to a reluctant “yes” vote from Sen. Steven Bradford, D-Gardena, who said he still has “great concerns” about the bill but that he would support moving it along.

Bradford’s communications director, Jerome Parra, told The Bee in an email statement that the senator “is a strong defender of a free press and particularly one that includes strong minority journalism outlets.”

“Senator Bradford is concerned about the requirement that outlets must carry media liability insurance to qualify for the tax credit. He worries that smaller and minority-focused media outlets may not be able to effectively satisfy this requirement,” Parra wrote.

He added that Bradford also is concerned about the “mitigation fee” imposed by SB 1327. That refers to the 7.25% state sales and use tax rate that would be applied to all online advertising revenue in excess of $2.5 billion.

Bradford was concerned about how that fee could impact small businesses that advertise on those sites, Parra wrote.

The money extracted from that fee would fund a new tax credit for qualifying news outlets. The committee amended the bill to create an enhanced employee tax credit for very small newsrooms, with five or fewer employees, and also to set aside funds for fellowships and training assistance for reporters.

Committee Chair Anna Caballero, D-Fresno, and Sens. Angelique Ashby, D-Sacramento, and Aisha Wahab, D-Hayward, also voted yes on the bill. The committee’s two Republicans, Senate Minority Leader Brian Jones of Santee and Sen. Kelly Seyarto of Murrieta, voted no. Sen. Josh Becker, D-Menlo Park, did not vote.

While Google and Meta, the parent company of Facebook and Instagram, would be the two main targets of the bill, neither company has commented on the legislation yet. The bill is opposed by a number of business groups, including the California Chamber of Commerce.

While the bill has the support of some media organizations and labor groups, the California News Publishers Association, of which The Sacramento Bee’s parent company, McClatchy, is a member, has yet to take a position on the bill.

Another bill, AB 886, dubbed the California Journalism Preservation Act, has passed out of the Assembly and currently sits in the Senate Judiciary Committee. That bill, which has the support of CNPA, would require social media companies such as Google and Meta to pay a fee for every article that is linked to on their platforms.



In response to that bill, Google announced last month that it would begin experimenting with removing links to California news websites on its search platform, though it is not yet clear what impact that move has had on traffic to those sites.

Reached for comment, Glazer said the tax credit bill “needed four votes, got four votes.”

“And we’ll continue our conversation about how to stabilize our local news and help them come back,” he said.

Glazer said he believed the committee amendments were responsive to Bradford’s concerns about the bill.

“It’s a very significant effort to restore the Fourth Estate in California to the benefit of our democracy,” he said.

The bill will go for a Senate floor vote next week, Glazer said.