Summary

Denies federal tax deductions for employer spending intended to influence employees about union organizing, collective bargaining, or other labor-organization activities. It expands the Internal Revenue Code to define such disallowed expenditures, creates exceptions (for things like communications with a certified employee representative, certain shareholder disclosures, and amounts paid by unions), requires Treasury/IRS guidance within 240 days, and imposes new employer and third‑party information‑reporting requirements with monetary penalties for failures to report. The rule applies to amounts paid or incurred in taxable years beginning after 240 days following enactment.

Key Points

• Disallows business tax deductions for employer spending intended to influence employees about union organizing or labor activities.
• Defines covered "labor organization activity" using existing labor‑law definitions and gives the Treasury authority to identify other covered activities.
• Creates a range of exceptions (e.g., communications with certified representatives, shareholder disclosures, voluntary recognition, union‑paid amounts, required postings).
• Requires Treasury/IRS guidance and regulations within 240 days of enactment and sets the law to take effect for taxable years beginning after that 240‑day period.
• Imposes new employer reporting obligations and penalties for failing to disclose covered expenditures on tax returns.
• Adds a third‑party filing duty for outside consultants or firms conducting influence activities on an employer's behalf.
• Penalties for nondisclosure can be substantial (minimum $10,000 or $1,000 per full‑time equivalent employee, plus escalations up to a cap).
• Aligns tax policy with the view that taxpayer subsidies should not support employer efforts to influence employee labor choices.

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