New Bill Offers Tax Credits Up To $0.30 Per Subscriber for Carrying Independent Programmers

This proposed legislation, the "Independent Programmers Tax Incentive Act," aims to shake up your channel lineup by offering tax breaks to companies that distribute video programming.

The Carrot: A Tax Credit for Indie Content

The core idea is a new tax credit for what the bill calls "eligible distributors" – think traditional cable companies or newer streaming services that offer live channel packages (referred to as virtual multichannel video programming distributors or vMVPDs). To get the credit, these distributors need to sign a deal for "qualifying carriage" with a "qualified independent programmer."

Here's the breakdown:

• What's "Qualifying Carriage"? It means a written agreement where the distributor adds or expands carriage of an independent programmer to reach at least 40% of its subscriber base and pays that programmer a license fee.
• Who's a "Qualified Independent Programmer"? According to Section 2, it's a U.S.-based programmer that isn't publicly traded and isn't tied to major media conglomerates.
• How Much is the Credit? It’s calculated per programmer agreement. The distributor can claim the lesser of either the actual net license fees paid to the indie programmer or $0.10 times their average monthly subscriber count for that specific agreement. However, there's an overall cap: the total credits a distributor can claim across all such agreements can't exceed $0.30 multiplied by their average monthly subscriber count.

Essentially, if your cable or streaming provider picks up a new channel from a smaller, independent U.S. media company and shows it to a decent chunk of their customers, they could reduce their tax bill. The bill specifies this applies to expenses paid after the Act becomes law.

Keeping Score: FCC Reports and Data Access

To track the impact, Section 3 mandates the Federal Communications Commission (FCC) to report to Congress every two years. These reports will detail how many independent programmers are being carried by distributors (both traditional and virtual) and for how long, on average. The FCC is also asked for recommendations on how to boost these numbers.

To help the FCC write these reports, the bill includes a provision allowing the Secretary of the Treasury (who oversees the IRS) to share tax return information specifically about companies claiming this new credit with the FCC upon written request. The bill states this information is only for preparing the reports and cannot include identifiable taxpayer details in the final public report. This data sharing aims to give the FCC concrete numbers on the credit's usage but involves sharing sensitive tax information between government agencies.