No Tax Breaks for Union Busting (NTBUB) Act
This bill denies employers a tax deduction for any expenditures incurred for attempting to influence their employees with respect to labor organizations or labor organization activities, such as elections, labor disputes, and collective actions.
The bill requires employers to report on their attempts to influence their employees with respect to labor organizations and their activities.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5456 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 5456
To amend the Internal Revenue Code of 1986 to end the tax subsidy for
employer efforts to influence their workers' exercise of their rights
around labor organizations and engaging in collective action.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 14, 2023
Mr. Norcross (for himself, Ms. Barragan, Mrs. Beatty, Ms. Blunt
Rochester, Ms. Bonamici, Mr. Bowman, Ms. Budzinski, Mr. Carson, Mr.
Casar, Mr. Casten, Ms. Clarke of New York, Mr. Cleaver, Mr. Connolly,
Mr. Courtney, Ms. Craig, Mr. Crow, Mr. Cuellar, Mr. Davis of Illinois,
Ms. Dean of Pennsylvania, Ms. DeLauro, Mr. Deluzio, Mr. DeSaulnier,
Mrs. Dingell, Mr. Doggett, Mr. Espaillat, Mr. Evans, Mr. Foster, Mr.
Frost, Mr. Gallego, Mr. Garamendi, Ms. Garcia of Texas, Mr. Garcia of
Illinois, Mr. Robert Garcia of California, Mr. Golden of Maine, Mr.
Goldman of New York, Mr. Gomez, Mr. Gottheimer, Mr. Green of Texas, Ms.
Hoyle of Oregon, Ms. Jackson Lee, Ms. Jayapal, Ms. Kaptur, Mr. Khanna,
Mr. Kildee, Mr. Kim of New Jersey, Mr. Krishnamoorthi, Ms. Kuster, Mr.
Larsen of Washington, Ms. Lee of California, Ms. Lofgren, Mr. Lynch,
Mr. Magaziner, Ms. McCollum, Mr. McGarvey, Mr. McGovern, Mr. Menendez,
Mr. Moulton, Mr. Mrvan, Mr. Mullin, Mr. Nadler, Mrs. Napolitano, Mr.
Neguse, Mr. Nickel, Ms. Norton, Ms. Ocasio-Cortez, Ms. Omar, Mr.
Pallone, Mr. Panetta, Mr. Pascrell, Mr. Phillips, Ms. Pingree, Mr.
Pocan, Ms. Porter, Ms. Pressley, Mr. Quigley, Mr. Raskin, Ms. Sanchez,
Mr. Sarbanes, Ms. Scanlon, Ms. Schakowsky, Mr. Schiff, Mr. Sherman, Ms.
Sherrill, Ms. Slotkin, Mr. Smith of Washington, Mr. Sorensen, Mr. Soto,
Ms. Stansbury, Mrs. Sykes, Mr. Takano, Ms. Titus, Ms. Tlaib, Ms.
Tokuda, Mr. Tonko, Mrs. Trahan, Mr. Trone, Ms. Underwood, Mr. Veasey,
Ms. Velazquez, Ms. Waters, Mrs. Watson Coleman, Ms. Wild, Ms. Williams
of Georgia, Ms. Wilson of Florida, Mr. Torres of New York, Mrs.
Foushee, Ms. Lois Frankel of Florida, Mr. Boyle of Pennsylvania, Ms.
Chu, Ms. Wasserman Schultz, and Mr. Fitzpatrick) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to end the tax subsidy for
employer efforts to influence their workers' exercise of their rights
around labor organizations and engaging in collective action.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``No Tax Breaks for Union Busting
(NTBUB) Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The National Labor Relations Act (29 U.S.C. 151 et
seq.) declares that it is the right of employees to form, join,
or assist labor organizations.
(2) The National Labor Relations Act further declares that
it is ``the policy of the United States to eliminate the causes
of certain substantial obstructions to the free flow of
commerce and to mitigate and eliminate these obstructions when
they have occurred by encouraging the practice and procedure of
collective bargaining and by protecting the exercise by workers
of full freedom of association, self-organization, and
designation of representatives of their own choosing . . .''.
(3) Despite Congress' intention to give workers full agency
in these matters, many employers regularly choose to involve
themselves, lawfully or unlawfully, in the decisions of their
employees about whether to avail themselves of their rights
under the National Labor Relations Act and the Railway Labor
Act (45 U.S.C. 151 et seq.).
(4) Employers frequently violate labor laws around
organizing and collective action. The Economic Policy Institute
finds that in approximately 4 of 10 labor organization
elections in 2016-2017 employers were charged with committing
an unfair labor practice. Among larger bargaining units of 61
employees or more, over 54 percent of elections have an unfair
labor practice charge.
(5) In practice, these unfair labor practices often include
charges such as employees being illegally fired for labor
organization activity, refusal to bargain in good faith with
labor organizations, or coercion and intimidation. Employers
also frequently use captive audience meetings, workplace
surveillance, and other lawful or unlawful tactics to sway
labor organization elections.
(6) Whether or not there are charges of unlawful behavior,
employers spend millions of dollars to sway the opinions of
their employees with respect to whether or how to exercise
their rights under the National Labor Relations Act and the
Railway Labor Act. According to the Economic Policy Institute,
companies spent $340,000,000 yearly on outside consultants to
sway their workers' opinions about labor organization
activities. This and other spending interfere with the United
States goal of ``encouraging the practice and procedure of
collective bargaining''.
(7) The Internal Revenue Code of 1986 has long recognized
that spending by businesses with the purpose of influencing the
general public with respect to elections, while it may be
lawful, is not tax deductible. Congress should extend that
principle to spending done by employers to influence workers'
elections and collective bargaining decisions. These free
choices to exercise the rights to engage in collective
bargaining, labor organization representation, and other lawful
collective activities should be made without taxpayer subsidies
of undue outside influence from employers.
SEC. 3. DENIAL OF DEDUCTION FOR ATTEMPTING TO INFLUENCE EMPLOYEES WITH
RESPECT TO LABOR ORGANIZATIONS OR LABOR ORGANIZATION
ACTIVITIES.
(a) In General.--Section 162(e)(1) of the Internal Revenue Code of
1986 is amended by striking ``or'' at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and inserting ``,
or'', and by adding at the end the following new subparagraph:
``(E) any attempt to influence the taxpayer's
employees with respect to labor organizations or labor
organization activities, including with respect to the
opinion of such employees regarding such organizations
or activities.''.
(b) Labor Organizations; Labor Organization Activities Defined.--
Section 162(e) of the Internal Revenue Code of 1986 is amended by
redesignating paragraph (6) as paragraph (7) and by inserting after
paragraph (5) the following new paragraph:
``(6) Labor organizations and labor organization activity
defined.--For purposes of this subsection--
``(A) Labor organization.--The term `labor
organization' has the meaning given such term in
section 3 of the Labor-Management Reporting and
Disclosure Act of 1959 (29 U.S.C. 402).
``(B) Labor organization activity.--
``(i) In general.--The term `labor
organization activity' means labor organization
elections, labor disputes, collective actions,
and such other related activities identified by
the Secretary.
``(ii) Other terms.--For purposes of clause
(i)--
``(I) Collective action.--The term
`collective action' means any action,
including collective bargaining,
described in section 7 of the National
Labor Relations Act (29 U.S.C. 157) or
any action that is a right of employees
or labor organizations under the
Railway Labor Act (45 U.S.C. 151 et
seq.).
``(II) Labor dispute.--The term
`labor dispute' has the meaning given
such term under section 3 of the Labor-
Management Reporting and Disclosure Act
of 1959 (29 U.S.C. 402).
``(III) Labor organization
election.--The term `labor organization
election' means any election described
in section 9 of the National Labor
Relations Act (29 U.S.C. 159) or
section 2 of the Railway Labor Act (45
U.S.C. 152).''.
(c) Special Rules.--
(1) In general.--Section 162(e)(4) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraph:
``(D) Expenses relating to labor organizations or
labor organization activities.--
``(i) In general.--For purposes of
paragraph (1)(E), amounts paid or incurred in
connection with attempting to influence the
taxpayer's employees with respect to labor
organizations or labor organization activities
include--
``(I) any amount paid or incurred
directly or indirectly by the taxpayer,
including wages and other general and
administrative costs, in connection
with an action that results in--
``(aa) a complaint issued
under section 10 of the
National Labor Relations Act
(29 U.S.C. 160) against the
taxpayer for an unfair labor
practice under section 8(a) of
such Act (29 U.S.C. 158(a)),
``(bb) a settlement offer
related to an investigation by
the National Labor Relations
Board of a charge of an unfair
labor practice under section
8(a) of such Act (29 U.S.C.
158(a)) that results in a
settlement of such charge
without issuance of a complaint
under section 10 of such Act
(29 U.S.C. 160), or
``(cc) a finding of
interference, influence, or
coercion by a Federal court
under section 2 of the Railway
Labor Act (45 U.S.C. 152),
``(II) any amount paid or incurred
directly or indirectly by the taxpayer,
including wages and other general and
administrative costs, in producing,
conducting, or attending any meeting or
training--
``(aa) which includes
employees of the taxpayer who
are or who could become members
of a unit appropriate for the
purposes of collective
bargaining, and
``(bb) at which labor
organizations or a labor
organization activity is
discussed, and
``(III) any amount which is
required to be reported under the
Labor-Management Reporting and
Disclosure Act of 1959 (29 U.S.C. 401
et seq.).
``(ii) Exceptions.--The following amounts
shall not be treated as amounts paid or
incurred in connection with attempting to
influence the taxpayer's employees with respect
to labor organizations or labor organization
activities under paragraph (1)(E):
``(I) Amounts paid or incurred for
communications or negotiations directly
with the designated or selected
representative of the employees of the
taxpayer described in section 9(a) of
the National Labor Relations Act (29
U.S.C. 159(a)) or under the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(II) Amounts paid or incurred for
communications directly with
shareholders, as may be required under
section 13 of the Securities Exchange
Act of 1934 (15 U.S.C. 78m).
``(III) Amounts paid or incurred
for communications or consultations by
the taxpayer in the process of
voluntarily recognizing a labor
organization as a representative in
accordance with section 9 of the
National Labor Relations Act (29 U.S.C.
159).
``(IV) Amounts paid or incurred
with respect to the operation of a
labor-management partnership described
in a collective bargaining agreement in
effect between a representative of
employees of the taxpayer and the
taxpayer, including a labor management
committee established pursuant to
section 205A(a) of the Labor Management
Relations Act, 1947 (29 U.S.C.
175a(a)).
``(V) Amounts paid or incurred for
communications or consultations related
to the operation of a grievance
procedure described in a collective
bargaining agreement in effect between
a representative of employees of the
taxpayer and the taxpayer.
``(VI) Amounts paid or incurred by
a labor organization.
``(VII) Amounts paid or incurred
for communication materials, including
visual or audio media, required to be
posted for, or provided to, employees
of the taxpayer by law, including under
the National Labor Relations Act (29
U.S.C. 151 et seq.) or the Railway
Labor Act (45 U.S.C. 151 et seq.).
``(VIII) Amounts paid or incurred
relating to a complaint which is issued
by the National Labor Relations Board
and which is set aside in full in
accordance with subsection (e) or (f)
of section 10 of such Act.''.
(2) Regulatory authority.--
(A) In general.--Section 162(e) of such Code, as
amended by subsection (b), is amended by redesignating
paragraph (7) as paragraph (8) and by inserting after
paragraph (6) the following new paragraph:
``(7) Regulations.--The Secretary shall prescribe such
guidance, rules, or regulations as are necessary to carry out
the purposes of this subsection, including rules relating to
the timing of any deductions in connection with amounts
described in paragraph (4)(D)(ii)(VIII).''.
(B) Timing.--Not later than the date that is 240
days after the date of the enactment of this Act, the
Secretary of the Treasury (or the Secretary's delegate)
shall prescribe guidance, rules, or regulations with
respect to the application of the amendments made by
this Act.
(d) Information Reporting.--
(1) Certain information included in tax returns.--
(A) In general.--Part I of subchapter B of chapter
68 is amended by adding at the end the following new
section:
``SEC. 6720D. FAILURE TO INCLUDE CERTAIN INFORMATION WITH RESPECT TO
EMPLOYER ACTIVITIES RELATING TO LABOR ORGANIZATIONS.
``(a) In General.--If any taxpayer who makes expenditures described
in section 162(e)(1)(E) fails to provide with the return of tax for the
taxable year to which such expenditures relate the information provided
in subsection (c) with respect to such expenditures, or who fails to
provide all of the information required under subsection (b) or fails
to provide correct information, shall pay a penalty in the amount
determined under subsection (b).
``(b) Determination of Penalty Amount.--
``(1) In general.--The amount of the penalty under this
section for any failure described in subsection (a) shall be
the greater of--
``(A) $10,000, or
``(B) the product of $1,000 and the number of full
time equivalent employees of the employer (as
determined under section 45R(d)(2)).
``(2) Increased penalty where failure continues.--
``(A) In general.--If any failure described in
subsection (a) (1) continues for more than 90 days
after the day on which the Secretary mails notice of
such failure to the taxpayer, the taxpayer shall pay a
penalty (in addition to the amount of any penalty under
paragraph (1)) equal to the amount determined under
paragraph (1) for each 30-day period (or fraction
thereof) during which such failure continues after the
expiration of such 90-day period.
``(B) Limitation.--The penalty imposed under this
paragraph with respect to any failure shall not exceed
$100,000.
``(c) Information To Be Provided.--The information required under
this subsection shall include--
``(1) the dates that such activities described in section
162(e)(1)(E) took place,
``(2) a statement indicating whether the activity was an
activity described in item (aa), (bb), or (cc) of section
162(e)(4)(D)(i)(I),
``(3) the amounts paid or incurred for such activities,
``(4) a copy of any disclosures which are required to be
reported under the Labor-Management Reporting and Disclosure
Act of 1959 (29 U.S.C. 401 et seq.), and
``(5) such other information as the Secretary may
prescribe.
``(d) Reasonable Cause Exception.--No penalty shall be imposed by
this section on any failure which is shown to be due to reasonable
cause and not due to willful neglect.''.
(B) Clerical amendment.--The table of sections for
part I of subchapter B of chapter 68 is amended by
adding at the end the following new item:
``Sec. 6720D. Failure to include certain information with respect to
employer activities relating to labor
organizations.''.
(2) Third-party information reporting.--
(A) In general.--Subpart A of part III of
subchapter A of chapter 61 of the Internal Revenue Code
of 1986 is amended by inserting after section 6039J the
following new section:
``SEC. 6039K. INFORMATION WITH RESPECT TO CERTAIN EMPLOYER ACTIVITIES
RELATING TO LABOR ORGANIZATIONS.
``(a) In General.--Any person conducting activities described in
section 162(e)(1)(E) on behalf of another person shall file a return
(at such time and in such manner as the Secretary may by regulations
prescribe, which includes the information described in subsection (b)).
``(b) Information To Be Provided.--Information required under
subsection (a) shall include--
``(1) the person on behalf of whom the activities described
in section 162(e)(1)(E) were performed,
``(2) the dates that such activities described in such
section took place,
``(3) a statement indicating whether the activity was an
activity described in item (aa), (bb), or (cc) of section
162(e)(4)(D)(i)(I),
``(4) the amounts paid or incurred for such activities, and
``(5) such other information as the Secretary may
prescribe.''.
(B) Penalty.--Subparagraph (B) of section
6724(d)(1) of such Code is amended--
(i) by striking the comma at the end of
clause (xxvii), as added by the Infrastructure
Investment and Jobs Act, and inserting ``,
or'', and
(ii) by adding at the end the following new
clause:
``(xxviii) section 6039K (relating to
information with respect to certain employer
activities relating to labor organizations),
and''.
(C) Clerical amendment.--The table of sections for
subpart A of part III of subchapter A of chapter 61 of
such Code is amended by inserting after the item
relating to section 6039J the following new item:
``Sec. 6039K. Information with respect to certain employer activities
relating to labor organizations.''.
(e) Conforming Amendments.--
(1) The heading for subsection (e) of section 162 of the
Internal Revenue Code of 1986 is amended by striking ``and
Political Expenditures'' and inserting ``, Political
Expenditures, and Labor Organization Expenditures''.
(2) The heading of subparagraph (C) of section 162(e)(4) of
such Code is amended by striking ``and political activities''
and inserting ``, political, and labor organization
activities''.
(f) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date that is 240 days after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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