California lawmakers advance tax on Big Tech to help fund news industry

The California state Senate on Thursday passed legislation aimed at helping the news industry by imposing a new tax on some of the biggest tech companies in the world.

Senate Bill 1327 would tax Amazon, Meta and Google for the data they collect from users and pump the money from this “data extraction mitigation fee” into news organizations by giving them a tax credit for employing full-time journalists.

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

Its passage comes the same week lawmakers advanced another bill that seeks to resuscitate the local news business, which has suffered from declining revenue as technology changes the way people consume news. Assembly Bill 886 would require digital platforms to pay news outlets a fee when they sell advertising alongside news content.

Glazer said his bill is meant as a complement to the other measure, adding that he and its author, Assemblymember Buffy Wicks (D-Oakland), plan to work with the companies that could be affected by both bills “in balancing everyone’s interest.”

The legislation passed 27 to 7, with one Republican — Sen. Scott Wilk (R-Santa Clarita) — joining Democrats in support. As a tax increase, it required support from two-thirds of the Senate and now advances to the Assembly.

A Republican who opposed the bill said technology is changing many industries, not just journalism, and that some of the innovations have led to inspiring new ways to consume news, such as through podcasts or nonprofit news outlets.

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

Opponents of the bill include tech company trade associations TechNet, Internet Coalition and Chamber of Progress; the California Chamber of Commerce; and numerous local chambers of commerce.

Supporters include unions representing journalists, a coalition of online and nonprofit news outlets, and the publishers of several small newspapers.

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