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California lawmakers advance tax on Big Tech to help fund news industry

The California Senate on Thursday legislation It aims to support the news industry by imposing new taxes on some of the world's largest technology companies.

Senate Bill 1327 It would tax Amazon, Meta and Google on the data they collect from users, and funnel money from this “data extraction mitigation fee” to news organisations by giving them tax credits for hiring full-time journalists.

“Just as we fund the film tax credit with no state input into the content, the same should be true for this journalism tax credit,” said Sen. Steve Glaser (D-Orinda), who introduced the bill on the Senate floor, positioning the bill as a measure to protect democracy and freedom of the press.

The bill's passage came the same week that lawmakers introduced a separate bill aimed at reviving the local news industry, which has suffered declining revenue as technological advances change the way people consume news. Assembly Bill 886 It would require digital platforms to pay news publishers when they sell advertising alongside news content.

Glaser said the bill is intended to complement the other bills, adding that she and the bill's author, Rep. Buffy Wicks (D-Oakland), will work with businesses that may be affected by both bills to “balance everyone's interests.”

The bill passed with a 27-7 vote, with Republican Sen. Scott Wilk of Santa Clarita joining the Democrats. Because it is a tax increase bill, it needs the support of two-thirds of the Senate and now moves to the House.

Republicans who opposed the bill said technology is transforming many industries, not just journalism, and that some of that innovation has spurred new ways to consume news, such as through podcasts and nonprofit news outlets.

“These are all new models, and very few people under 50 pick up a print newspaper,” said Sen. Roger Niello (R-Fair Oaks). “This is an evolution of the marketplace.”

Opponents of the bill include TechNet, a tech company trade group, the Internet Coalition, the Chamber of Progress, the California Chamber of Commerce and numerous local chambers of commerce.

Supporters include labor unions representing journalists, a coalition of online and non-profit news organizations and publishers of several smaller newspapers.

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