Can't a website be a newspaper?

I spent some of yesterday afternoon reading about Senator Benjamin Cardin's proposal to make it easier for newspapers to achieve tax-exempt nonprofit status. The law has the mixed blessings of novelty, and I think that on balance it's a good idea.

But here's one question that I started to wonder about: How does the law actually define a newspaper? (Or "qualified newspaper corporation," in the legal parlance.) The law -- I've stuck the pdf at the bottom of this post -- lays out three standards, the first of which is:

the trade or business of such corporation or organization consists of publishing on a regular basis a newspaper for general circulation

It didn't seem obvious that this would include websites. And, indeed, it probably doesn't. Here's what a senior Cardin staffer told me when I asked whether the law would cover a website:

I don't think so. I think this [law] is truly for a published product. That would certainly cut out a website. It's not publishing a product.

When I followed up on the difference -- isn't news on the web still a product? -- the Cardin staffer argued that one important distinction between print and web was the cost related to publishing a physical newspaper: "I don't think websites have the same kinds of costs. Does the Huffington Post pay pensions? Does the Huffington Post pay healthcare? I doubt it."

The concern in Cardin's office was that the law would be considered over-inclusive. I'd guess they don't want to create a law under which every pajamas-clad blogger -- you know the metaphor -- could claim tax-exempt status.

But the decision to exclude websites is nonetheless strange. The cost of printing a physical newspaper isn't an ineluctable burden that must be shouldered by a free press. It's a historically limited delivery mechanism for the news. The idea of delivering news on a bundle of dead trees hasn't been around forever and it won't be around forever. (If anything, there is widespread consensus within and without the industry that physical product won't be around for much longer.) Don't we want a law that subsidizes the news gathering and not the physical newspaper?

In the long run, subsidizing the physical product might make the news-gathering harder, because it raises the cost of innovation. Why build a website when you can build a tax-free newspaper?

Anyway, here's the law:
OTT09196_xml.pdf


Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

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