🔒CT lawmakers consider bill creating 5-year advertising tax credit for small businesses

State lawmakers are considering a proposal to offer tax incentives to small businesses that advertise with local news outlets. House Bill 5569, introduced by the legislature’s Finance, Revenue and Bonding Committee, would create a temporary tax credit for small businesses that buy ads in local newspapers or on local radio and television stations. The program would run for five years, beginning Jan. 1, 2027. Under the proposal, businesses with 50 or fewer employees could claim a credit equal to 80% of their qualifying advertising expenses in the first year, up to $5,000. In the following four years, the credit would drop to 50% of expenses, capped at $2,500 annually. The bill defines eligible news outlets as local publications or broadcasters that primarily serve a community and produce original news content. To qualify, a local newspaper must employ at least one full-time journalist who resides in the community it serves and meet certain ownership and funding restrictions. The measure applies to advertising expenses incurred in the ordinary course of business for placements in local newspapers or on broadcast radio and TV stations licensed by the Federal Communications Commission to serve a local community. The tax credit would be available for income years beginning on or after Jan. 1, 2027, and before Jan. 1, 2032. It could be claimed against certain state business taxes, with provisions allowing shareholders, partners or owners of pass-through entities to claim the credit. The bill also specifies that businesses may not both claim the tax credit and deduct the same advertising expenses as a business expense. The ad tax credit proposal, which could be a boost for local news organizations, comes as the legislature’s Government Administration and Elections Committee is considering HB 5527, which would allow municipalities to post legal notices on their official websites and in municipal buildings “in lieu of in a newspaper.” Under that proposal, when state law requires a municipality to publish a legal notice in a daily newspaper, towns and cities could choose instead to post the notice on the municipality’s website and display printed copies in town or city hall and at least two other “conspicuous” public locations, such as a library or senior center. State law has long required many of those notices to be published in a daily or weekly newspaper with “substantial circulation” in the municipality. While municipal leaders argue the existing system is outdated and costly, newspaper publishers say legal notices should appear in independent publications to ensure they remain publicly accessible and can’t be altered or removed by the government issuing them. Public notices also provide a revenue stream for newspapers, as municipalities pay to have them printed. A public hearing on HB 5527 was held on March 13, but that bill remains in committee. A date for a public hearing on HB 5569 by the Finance Committee has not yet been set.