Sponsors (30)
The bill strengthens worker free-association rights and transparency by denying tax benefits for employer spending that seeks to influence union activity, but it raises compliance costs, uncertainty, and potential financial burdens for employers—especially small businesses—while risking a chill on lawful employer-employee communications.
Unions and employees face fewer employer-funded anti-union campaigns because employers cannot deduct expenses used to influence union elections, reducing the financial incentive to interfere with organizing.
Taxpayers, regulators, and the public gain greater visibility into employer spending on labor-relations influence through new reporting requirements, improving transparency and accountability.
Taxpayers would no longer indirectly subsidize employer anti-union consulting and communications because those influence-related expenses are nondeductible.
Small businesses and other employers could face materially higher after-tax costs or lost deductions, which may reduce funds available for wages, hiring, or investment.
New reporting requirements and steep penalties (including minimum fines and per‑employee penalties) create significant compliance burdens and risk of large fines for employers.
Broad definitions of nondeductible activity and Treasury discretion increase legal uncertainty and are likely to spur litigation and additional IRS compliance costs.
Based on analysis of 3 sections of legislative text.
Denies federal tax deductions for employer spending to influence its own employees about unions or collective bargaining, with specific exceptions and definitions.
Official title: 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 actions.
Introduced April 4, 2025 by Ben Ray Luján · Last progress April 4, 2025
Makes employer spending to influence its own employees about unions or collective bargaining nondeductible for federal income tax purposes, while defining covered activities and listing limited exceptions. The bill amends Internal Revenue Code section 162(e) to treat amounts paid to influence employees’ labor organization choices as nondeductible business expenses and clarifies definitions and reporting rules.