On November 18, 2024, Virginia lawmakers introduced House Bill 961 (VA HB961), a legislative proposal aimed at supporting small businesses through a new tax credit for local media advertising. The bill seeks to address the challenges faced by small businesses in promoting their services while simultaneously bolstering local media outlets.

The primary provision of VA HB961 establishes a nonrefundable tax credit for eligible small businesses—defined as those with fewer than 50 full-time employees—that incur advertising expenses in local newspapers, radio, or television stations. For the first year the credit is claimed, businesses can receive a credit of up to 80% of their advertising costs, capped at $4,000. In subsequent years, the credit decreases to 50% of expenses, with a maximum of $2,000. The total credits available each year are limited to $10 million, with any excess applications allocated on a pro-rata basis.

Key discussions surrounding the bill have focused on its potential economic impact. Proponents argue that the measure will not only assist small businesses in reaching local customers but also provide much-needed support to local media, which has faced declining revenues in recent years. Critics, however, have raised concerns about the bill's fiscal implications, questioning whether the state can afford to allocate $10 million annually to this initiative, especially in light of other pressing budgetary needs.

The bill's significance lies in its dual focus on economic revitalization and media sustainability. Experts suggest that by encouraging small businesses to advertise locally, the bill could foster community engagement and stimulate local economies. However, the long-term effectiveness of the credit will depend on the uptake by small businesses and the overall health of the local media landscape.

As VA HB961 progresses through the legislative process, stakeholders from both the business and media sectors are closely monitoring its developments. The outcome of this bill could set a precedent for future state-level initiatives aimed at supporting local economies and media entities.