U.S. Tax Code Doesn’t Keep Up with Advancements in Newsgathering

  • Danielle Coffey
  • 03.07.2016

It is universally acknowledged that newspaper investments in journalism translate to readers’ awareness of the world around them, including politics, the economy, entertainment and countless other aspects of our dynamic society. Investments in journalism do not vary depending on the medium – digital or print – in which the reader consumes content. So, why does our tax code distinguish between these two mediums when allowing for deductions of income?

The answer is simple: The tax code has simply not kept up with technology. Newspaper companies are currently investing in and receiving income from subscriber fees and advertisements displayed in print, desktop, tablet, smartphones, etc. However, Section 199 of the tax code only allows for a deduction from income for the revenue received for print. This is particularly imbalanced considering that the increase in newspaper digital revenue displaces losses from print.

Section 199 is intended to help reduce the tax burden for those business sectors developing products that generate investment in U.S. jobs and economic growth, of which newspapers are one. Because the format of newspapers has evolved significantly in the last several years, away from print and toward digital, newspapers unfortunately are not eligible to receive the tax break the IRS and Congress say they deserve. We recently urged the IRS to unilaterally fix this broken rule.

In order for the public’s enrichment and discourse to continue, no matter the platform in which they receive their news, we simply ask the IRS and the U.S. Congress to adhere to the original intent of Section 199 and update the law to reflect current newspaper consumption formats, including print, digital and mobile mediums. Doing so will allow newspaper companies to deduct gains from their digital business that can then be reinvested in the journalism that feeds our daily lives.



  • Danielle Coffey
Danielle Coffey is Vice President of Public Policy at News Media Alliance