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State Senate passes proposed tech tax to fund local news – Palo Alto Daily Post


A bill to tax Google, Facebook and Amazon to fund local news outlets was surprisingly passed by the Senate. The bill now goes to the Assembly.

The 7.25 percent tax on digital advertising is estimated to generate $500 million a year for local news organizations whose work has been expropriated by tech giants.

The tax’s sponsor, Senator Steve Glazer (D-Orinda), said just a month ago that he doubted the bill would pass, so it was a surprise that the bill was voted on Thursday and passed by a vote of 27 to 7, well over the two-thirds threshold. Senator Josh Becker (D-Menlo Park) did not vote on the bill.

The California Chamber of Commerce called the tax a “job killer” because it forces small businesses to pay more for online advertising.

The tax, which aims to fund the hiring and employment of reporters, is supported by several labor groups, including the California Federation of Teachers, journalists’ unions and a number of struggling media outlets desperate for government support.

An analysis for the Senate said that while newspapers receive funding from taxpayers, the government will not interfere in decisions about news content.

The left-leaning Chamber of Progress opposes the bill, saying the money would only go to newspapers with full-time reporters, leaving out smaller independents and foreign-language publications that can’t afford full-time staff. Robert Singleton of the Chamber of Progress says the money will disproportionately go to right-leaning media companies like the Sinclair Broadcast Group, which owns four television stations in California, and media companies owned by private equity firms. One of the winners, for example, will be the MediaNews Group, which Singleton says has gutted newspapers like the Mercury News and turned them into “shadows of their former selves.”

If passed, opponents warn that the bill, like a similar law in Maryland, will be challenged in court.

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