H.R. 2230: Independent Programmers Tax Incentive Act

The bill titled the Independent Programmers Tax Incentive Act proposes changes to the Internal Revenue Code that would provide tax credits to certain video programming distributors that carry independent programming channels. The key components of the bill are summarized as follows:

1. Tax Credits for Distributors

The bill introduces a new tax credit for eligible distributors, which include multichannel video programming distributors (MVPDs) and virtual multichannel video programming distributors (vMVPDs). This tax credit is specifically for the carriage of independent programmers.

2. Calculation of the Credit

The amount of the tax credit that an eligible distributor can claim is determined based on two factors:

• The net license fees that the distributor has paid to independent programmers during the taxable year.
• The number of subscribers to whom the programming is provided, calculated at a rate of $0.10 per subscriber per month, averaged over the taxable year.

However, the total credit for a distributor in any given year cannot exceed $0.30 per subscriber per month multiplied by the average number of subscribers.

3. Definitions

Several important terms are defined within the bill:

• Eligible Distributor: A business engaged in the trade of multichannel or virtual multichannel video programming distribution.
• Qualified Independent Programmer: A U.S.-based entity producing linear video programming that is not a publicly traded company or associated with one.
• Agreement for Qualifying Carriage: A formal arrangement where an eligible distributor commits to carry the programming of an independent programmer to at least 40% of its subscriber base, accompanied by a license fee.

4. Reporting Requirements

The Federal Communications Commission (FCC) is required to submit a biennial report to Congress that will include:

• The number of qualified independent programmers and their average distribution duration to subscribers.
• Recommendations to increase the number of such programmers and their distribution reach.

5. Protection of Taxpayer Information

The bill also stipulates that certain tax return information related to credits claimed under this legislation may be disclosed to the FCC for the purposes of their reporting, while ensuring that individual taxpayer identities remain confidential.

6. Effective Date

The provisions of this bill would apply to expenses that are incurred after the enactment date in taxable years ending thereafter.

Relevant Companies

• CMCSA (Comcast Corporation): As a major cable operator and multichannel video programming distributor, Comcast may be impacted by changes in subscriber offerings and the associated credits.
• T (AT&T Inc.): Operating as a telecommunications giant with video offerings, AT&T could see changes in financials based on new tax incentives for programming agreements.
• DIS (The Walt Disney Company): Disney, as a content provider, may be involved in agreements with independent programmers and could benefit indirectly from changes in distribution tactics by MVPDs.