Two bills to even playing field for online local news publications fail in Richmond

Two bills that would have given online-only local news publications like ARLnow some of the same privileges afforded legacy media outlets failed in Richmond over the past few weeks.

In the House of Delegates, HB 1920 would have included online local news publications that employ at least one full time journalist in an exemption from local Business, Professional, and Occupational License (BPOL) taxes.

Current statute exempts radio stations, television stations, newspapers, magazines, newsletters and “other publication[s] issued daily or regularly at average intervals not exceeding three months.” Online publications are not considered an “other publication” in Virginia, in part because the state exemption was originally passed in the late 1980s, before the advent of the modern commercial internet.

ARLnow’s parent company, which is based in Arlington and pays a mid-four-figure BPOL tax annually — nearly 10% of the company’s net income for 2022 — appealed the exclusion from the media outlet BPOL exemption to the Arlington Office of the Commissioner of Revenue in the fall. The office rejected the appeal, citing a 2020 Virginia Tax Commissioner ruling against a food blog that was also seeking the exemption.

Introduced by Del. Patrick Hope (D-Arlington), the bill garnered support from other Virginia online-only local news publishers but Arlington County officials expressed concern about a loss of tax revenue. Several other online publications, including Axios, are also based in Arlington.

HB 1920 was ultimately “laid on the table” by a House finance subcommittee, with committee members expressing both interest in studying the bill’s financial impact and surprise that legacy media outlets are excluded from BPOL.

Also considered this year was SB 1237, proposed by state Sen. Mark Obenshain (R-Harrisonburg), which would have given local governments and businesses the option of placing legal notice ads in qualifying online local news publications. Currently, such notices must be placed in printed newspapers to satisfy legal requirements.

Obenshain argued that numerous online-only local news publications have as many or more readers than their print counterparts, while citing the continued closure of print newspapers across the country, including the Richmond-area Chesterfield Observer earlier this month.

Here in Arlington, residents and County Board members have at times expressed frustration with the county placing its legal notices in the relatively lightly-circulated Washington Times newspaper. Board members, however, said that doing so is the most cost-effective way to meet state notice requirements and placing notices in the Washington Post, for instance, would be considerably more expensive.

Arlington County spent more than $37,000 with the Washington Times, an unabashedly conservative daily paper owned by an offshoot of the Unification Church, between fiscal years 2018 and 2019, according to a Freedom of Information Act response to a resident’s query in 2020.

The owners of ARLnow, Page Valley News and the MadRapp Recorder were among those to testify in favor of the bill last week. It was opposed by the Virginia Press Association and the publisher of InsideNoVa on the grounds that newspapers provide a permanent physical record of such notices and Virginia newspapers publishers already post notices online.

The state Senate’s judiciary committee ultimately voted 6-9 against the bill, after expressing concerns about which publications would qualify under SB 1237 and whether notices would be lost if online publications closed.

The vote was largely along party lines, with six GOP members voting in favor. Among those voting against it were members of the Democratic delegation from Fairfax County: Sen. Jennifer Boysko, Sen. Chap Petersen, Sen. Dick Saslaw and Sen. Scott Surovell. Previous attempts to pass a similar bill on the House side by Del. Hope have also failed in committee.

Online-only local news publishers who supported the bill — there are currently more than a dozen such local sites throughout the Commonwealth — have vowed to try again to gain bipartisan support for a modified version of this year’s bill during next year’s General Assembly session.

Separately, a bill from Del. Alfonso Lopez (D-Arlington) to provide tax credits that would benefit both print and online local news publishers, also failed in a House finance subcommittee. The bill, HB 2061, had the support of the Virginia Press Association.