New Tax Break for Media Owners: Sell Your Station to Diverse Buyers and Defer Taxes for Up to 16 Years

The newly proposed Broadcast Varied Ownership Incentives for Community Expanded Service Act—or the Broadcast VOICES Act—is essentially a tax policy move designed to shake up who owns the country’s radio and TV stations. Right now, ownership diversity is low: Congress notes that less than 4% of full-power commercial TV stations are minority-owned. This bill tries to fix that using a powerful incentive: the ability for station owners to defer capital gains taxes when they sell to a qualified diverse buyer.

The Tax Certificate: Deferring the Big Bill

Section 5 of the Act creates a new tax certificate program run by the Federal Communications Commission (FCC). If you own a broadcast station and sell it to a buyer who qualifies as being ‘owned and controlled by socially disadvantaged individuals,’ you can apply for this certificate. What does ‘socially disadvantaged’ mean here? It refers to women or anyone who has faced racial or ethnic prejudice or cultural bias because of their group identity. If the sale qualifies, the seller can treat the transaction as an ‘involuntary conversion’ for tax purposes—meaning they don't have to pay taxes on the profit right away, effectively deferring that payment. The FCC must cap this benefit at $50 million per single sale, and the program is set to expire after 16 years.

The Catch: Compliance is Key

For the seller to keep that sweet tax deferral, the new diverse owners have to hold onto and control the station for a minimum of two years and a maximum of three years. During this holding period, the new owners must certify to the FCC every 180 days that they are still meeting the ownership and management requirements. If the new owner fails to comply, the FCC notifies the IRS, and the original seller’s tax break is immediately revoked. That means the seller suddenly has to recognize that gain and pay the tax bill they thought they had deferred. This puts a real premium on the new owners’ stability and compliance, and it creates a long-term compliance headache for both the FCC and the IRS, who have to track these deferred gains.

A New Credit for Charitable Giving

Beyond the sale incentive, Section 6 introduces a brand-new tax credit for station owners who choose to donate their stations instead of selling them. If an owner donates a station to a charity that specifically focuses on training socially disadvantaged individuals in broadcast station operation, they can claim a tax credit equal to the fair market value of the donation. This is a significant break, but there’s a critical trade-off: if you take this credit, you cannot also claim the standard charitable tax deduction for that same contribution. You have to pick one. This provision aims to build up the pipeline of future diverse owners by funding training organizations with real assets.

What This Means for Regular Folks

While this bill is focused on media owners and tax code, it matters to the rest of us. If successful, the goal is to increase the diversity of voices and viewpoints on our local airwaves, which could change the information we consume. However, these incentives come at a cost. The tax deferrals and new tax credits are considered tax expenditures—money the government isn't collecting—which ultimately shifts the cost of encouraging media diversity onto the general taxpayer base. Furthermore, the bill relies on the FCC to establish clear rules and oversight for who exactly qualifies as a ‘socially disadvantaged individual’ and how they must manage the station to maintain compliance, which could be complex to enforce given the two-to-three-year holding requirement.