Bill would require newspapers and some digital publishers to file B&O tax performance reports, lawmakers told

House Finance took testimony on House Bill 1060 on Jan. 23, a bill that requires businesses claiming the business-and-occupation (B&O) tax exemption for printing and publishing newspapers and certain digital content to file an annual tax preference performance report with the Department of Revenue.

Rochelle Harris, committee staff, described the B&O tax as the state’s gross-receipts business tax and said the current exemption for newspapers and certain digital content is scheduled to expire Jan. 1, 2034. The bill would require any business claiming that exemption to file the complete annual tax performance report with DOR, she said. Harris said failure to file on time would require the taxpayer to repay the tax at the 0.484 percent B&O rate on the applicable activities; DOR could assess interest, but not penalties, if a business is found not to be eligible for the exemption and has claimed it.

Sponsor Representative Sharon Tomiko Santos (D-37) described HB 1060 as largely technical: she said that prior legislation (Second Substitute Senate Bill 5199) eliminated a preferential tax rate for newspapers for a period, but “we didn’t say what was going to happen on January 2, 2034.” Santos said the bill clarifies legislative intent that eligible newspapers and qualifying digital content revert to the original preferential rate of 0.484 percent rather than defaulting to a higher rate.

Steve Ewing of the Department of Revenue told the committee the bill is administrable and helps ensure consistent administration and taxpayer compliance. Ewing explained that the 2019–2024 changes removed a specific local-news definition from the printing-and-publishing classification in a way that left ambiguity about the applicable rate for revenue that does not qualify for the exemption; without clarification, that revenue could default to a higher service rate (about 1.5 percent), which DOR believes is inconsistent with legislative intent.

Committee members asked whether the bill would immediately change the current rate and whether it would affect revenues. DOR staff said the bill does not change the current exemption and that DOR assumes recipients of the current rate will file the reports; consequently the department does not expect a revenue effect and anticipates minimal administrative costs associated with rulemaking.

No formal committee vote on HB 1060 is recorded in the hearing portion of the transcript; the committee closed the hearing and proceeded to other items.