CA SB1327

Establishes a tax credit for taxable years 2025-2029 for qualified local news organizations and broadcast stations, allowing credits of 25-40% of qualified wages for journalists plus 20% of freelance content costs, with higher percentages for small publications and those offering health/retirement benefits.

Imposes a 7.25% tax on gross receipts exceeding $2.5 billion derived from data extraction transactions (selling user information/data to advertisers) beginning in 2026, excluding news media entities from taxation.

Creates the Data Extraction Mitigation Fee Fund to receive tax revenues, dedicating $15 million annually to journalism fellowships and up to $25 million for grants to nonprofit local news organizations, with remaining funds available for appropriation.

Allows a deduction against income taxes for amounts paid under the data extraction tax, effective 2026, to prevent double taxation on affected businesses.

Requires Franchise Tax Board administration with annual credit caps, prioritization for small publications with fewer than 10 employees, and mandatory reporting on credit utilization.