Sponsors (3)
Official title: To amend the Internal Revenue Code of 1986 to impose a tax on digital advertising services, and for other purposes.
Introduced December 1, 2025 by Jake Auchincloss · Last progress December 1, 2025
The bill uses a new federal digital-ad revenue stream to create dedicated, automatic Trust Funds that expand tutoring, local journalism support, and career-education funding—providing stable, targeted benefits to students, schools, and small businesses while locking revenue into earmarks that reduce fiscal flexibility, raise long-term baseline costs, and risk higher costs and administrative burdens for advertisers, states, and taxpayers.
Students in K–12 (especially struggling and Title I pupils) gain expanded access to one-on-one tutoring and supplemental instruction through automatically funded grant programs, likely improving learning outcomes.
Students and local communities benefit from increased, dedicated funding for career and technical education (Perkins programs) as State allotments are augmented, supporting workforce development and job-skills training.
Taxpayers and the public get a new federal revenue source (a digital advertising tax and routed §4286 receipts) that can fund these programs starting in 2026, reducing reliance on ad-hoc appropriations or pressure on other taxes.
Advertisers and digital platforms face a new federal tax and compliance requirements, which can reduce platform ad revenue and lead to higher ad prices that are often passed through to small businesses and consumers.
Routing a fixed share of §4286 receipts into multiple Trust Funds earmarks revenue, causing taxpayers to forgo those receipts for other priorities and reducing congressional flexibility and oversight over spending choices.
Treating Trust Fund appropriations as part of future formula bases (beginning FY2027) raises the baseline for federal spending, increasing long-term taxpayer costs and committing larger recurring outlays.
Based on analysis of 7 sections of legislative text.
Creates a digital advertising tax and directs one-third of receipts each to trust funds for local journalism, K–12 one-on-one tutoring grants, and CTE support, and establishes a competitive tutoring grant program.
Imposes a new federal tax on digital advertising services and directs one-third of revenue to three dedicated Treasury trust funds that finance (1) local journalism support, (2) one-on-one tutoring grants for Title I K–12 schools, and (3) Career and Technical Education (CTE) support under the Perkins Act. It also creates a competitive federal grant program to fund individual tutoring in Title I elementary and secondary schools and adjusts Perkins Act funding formulas to include CTE Trust Fund appropriations starting FY2027. The tax and trust-fund transfers apply to taxes received after December 31, 2025; the Secretary of Education must award tutoring grants competitively and begin awards within 180 days after enactment. Trust funds will deposit and make available one-third of the digital ad tax receipts for their respective programs, with transfers to cover tax credits if Congress later enacts them for local journalism or small-business advertising credits.