Legislation would clarify tax deductions for outside newspaper printing
NAA applauds the introduction of H.R. 4770 by Representative Pat Tiberi (R-OH), which would clarify the entity that is permitted to take tax deductions when content creators use outside vendors for contract printing.
Under Section 199 of the tax code, U.S. companies may take a deduction, reducing taxable income by up to 9%, for manufacturing in the United States, including the printing of newspapers. However, when newspapers use outside printers, the IRS has questioned whether the content creator is still permitted to take the tax deduction. This reasoning is flawed since the essence of the work being printed is owned and produced by the contracting entity.
Rep. Tiber’s bill would make clear that the deduction is allowed by the publisher if agreed to by all parties to the contract for printing. We will continue to advocate for this clarification, as well as the expansion of the deduction to digital distributions.