For months now, we’ve heard tales that the newspaper industry as we know it is “done.” Several big name papers have announced that they’re closing down or making cuts. Philadelphia’s own Daily News, for example, is no more.
Newspaper owners blame a perfect storm of a downturn in the economy, combined with the rise of social and new media, for the decline of the print press. Are we really ready to say that the industry, which has existed in the US since the first daily, the Pennsylvania Packet which fired up in 1784, is over?
Sen. Benjamin Cardin (D-MD) says not so fast. Cardin has introduced a bill that would allow newspapers to opt tax-exempt status. And before you call the idea completely crazy, consider what the bill is based on: the tax-exempt status of public radio.
In the 1950s, radio had trouble keeping up with the “new media” of the times: television. Noncommercial radio, in particular, was struggling to stay afloat. After years of trying various methods to set itself apart, noncommercial radio was thrown a bone by Congress when it was included in the Public Broadcasting Act of 1967. Three years later, National Public Radio (NPR) was created as a nonprofit corporation organized for tax-exempt purposes and still exists today.
Cardin believes that this kind of arrangement might be the way to save local newspapers.
Of course, those papers would have to make changes. To qualify as tax-exempt, they could no longer endorse political candidates, though they could cover elections (as NPR does). Fundraising would have to pass IRS muster, but if it did, advertising and subscription revenue would be tax-exempt to the papers.
What would this mean for readers? For one, a percentage of the subscriptions paid would be tax deductible – just like with NPR. The exact amounts would likely vary but in most cases, the actual cost of the item (in this case, the paper) is deducted from the donation to determine the tax exempt amount. So, for example, if it the actual cost of my Philadelphia Inquirer newspaper delivery is $2.50/week or $130/month and my subscription “membership” is $250, I would be able to claim $120 as a deduction on my individual taxes. Of course, those are just numbers that I made up – but you get the idea.
With the restrictions imposed by the IRS for tax-exempt organizations, this may not be the answer for all newspapers. But is it a start? John Sturm, president and chief executive officer of the Newspaper Association of America, thinks so.
It’s a clever idea. I’m not completely sold but I am intrigued. I’m a big fan of public radio (my husband is more than a little addicted to Car Talk). I’m also a big fan of newspapers (we’re doing our part to keep the industry going, we have several subscriptions). I am concerned about the possible demise of print newspapers and I’m so pleased to hear that our Congressional officials are thinking “outside of the box” in terms of ways to save the papers. I really did expect just a blatant plea for a bail-out from the industry and it’s encouraging to see that not happen and instead, that the industry is open to alternate ways of keeping afloat.
What do you think? Would you support “public” newspapers in your hometown?
This week, supporters of Proposition 8, which would ban gay marriage in California, released an ad, pictured above. The ad claims that under current law, gay marriage would be promoted in public schools and warned that churches which opposed same-sex unions would lose their tax exempt status. Richard Peterson, a law professor at Pepperdine University School of Law, appears in the ad, citing a newspaper article alluding to the loss of tax exempt status for those churches that oppose same sex marriage.
I never, ever, ever said anything about if churches do not perform same-sex marriages that you’ll lose your tax-exempt status.
DeKoven, who has never been contacted by the Yes on 8 campaign or Professor Peterson, authored an op-ed piece for the July 3 edition of the Gay & Lesbian Times entitled “Anti-Gay Clergy Should Fear Backlash.” Despite the title, DeKoven was not arguing that there might be tax consequences for those churches who oppose gay marriage; instead, he was arguing that it was not fair to allow tax deductions for donations to churches which are political but not allow tax deductions for donations to secular groups that are overtly political. That argument makes sense.
Issue advocacy on its face does not put tax exempt status at risk: it depends on the facts and circumstances. For example, the president of the Church of Latter Day Saints (LDS) issuance of a letter “from the pulpit” as was indicated in DeKoven’s piece, urging members to donate “means and time” to pass Proposition 8 is likely just a matter of issue advocacy. And to be clear, tax-exempt charitable organizations may take positions on public policy issues, even for those issues on which candidates have taken differing positions. However, encouraging voters to get behind an issue needs to be interpreted as simply that and not as intervention in a particular candidate’s campaign.
Even if a message from the charitable organization does not expressly encourage a vote for or against a specific candidate, there is a risk of violating the ban on political campaigning by a charitable group if the message appears to favor or oppose a candidate. That might include, for example, adding photos or statements from candidates in issue advocacy campaigns; directing voters to a particular candidate’s website; and literature that touts one candidate’s record on an issue. But simply advocating an issue is not a violation of the prohibition against politicking.
There is a fine line – and it’s clear to me that DeKoven was not implying that the line had been crossed in this circumstance. However, Professor Peterson and the folks at Yes to 8 apparently saw this as an opportunity to frighten taxpayers into believing that they couldn’t speak out against gay marriage under the current law. That’s just plain nonsense. It is short-sighted and narrow-minded of Professor Peterson to participate in such an ad campaign without arming himself with the facts – and if he had armed himself with the facts and moved ahead, shame on him.
Professor Peterson has not responded publicly to the criticisms against him. In the meantime, Pepperdine University School of Law has asked the Yes on 8 campaign to remove the Pepperdine affiliation from the ads; the campaign has not agreed to do so.
Funny. If the law actually were as Peterson has attempted to imply, he would have put Pepperdine’s tax exempt charitable status at risk for what appears to be taking a very public stance on a political issue… Only, Professor, that’s not the case, now is it?
Last month, a delegate from Galveston County, Texas presented a proposal to the Republican National Convention to revoke tax exempt status for the Church of Scientology.
Here is the Resolution:
The Resolution
Initiative for Texas Resolution Calling for the revocation of the Church of Scientology’s status as a Legitimate religion in the sate of Texas.
Be it resolved that the Church of Scientology in the state of Texas no longer be recognized as an official religion, thus revoking its religious tax exempt status in the state of Texas.
In order to preserve Scientology’s religious tax exempt status in the state of Texas an organization must meet objectives in order to qualify. They are listed in the following statements:
1.) The organization must have an official statement of Faith. The church of Scientology has no such statement.
2.) The organization must have some form of routine worship service. The church of Scientology has no such routine.
3.) Church services must be open and freely available to the public. The church of Scientology requires its members to pay an amount equal to or greater than 15,000 U S dollars and to be subjugated to months of mind altering auditing sessions in order for a member to obtain the information regarding the teachings of Scientology. Members who complete these courses are forced to sign agreements not to inform either unpaid/unaudited members or the general public of the teachings of Scientology.
Be it resolved that the church of Scientology in the state of Texas be officially regarded as a business and not as a religion.
Resolution adopted this twenty-ninth day of March, 2008, at the Precinct Convention of Precinct Number 341, and/or senatorial district 11 Convention, Galveston County, Texas of the Republican Party of Texas.
Hmm. This is certainly an interesting development as the Church of Scientology has had its share of battles with the IRS over the years regarding tax exempt status. In 1993, the Church of Scientology paid the feds $12.5 million as part of a settlement to obtain tax-exempt status. The details of the settlement have not been made public but reportedly included a special “church tax-compliance committee” and an agreement not to sue the IRS for pre-1993 claims.
The Church has been in existence since the 1950s and was established by author L. Ron Hubbard. The Church claims membership of between 8 and 15 million people worldwide. Famous Scientologists include Tom Cruise, Katie Holmes, Lisa Marie Presley, Kirstie Alley, Leah Remini, Beck and John Travolta – Tom Cruise and Katie Holmes actively promote the Church.
The IRS had previously denied status to the Church on the grounds that the Church was a “for profit” business – countries such as Germany have continued to deny tax-exempt status to the Church for similar reasons. The church reacted with a barrage of lawsuits. It will indeed be interesting to see if, in the event that Texas was to make this resolution the law, a similar end would happen in Texas. What do you think will happen?
