No Tax Breaks for Union Busting (NTBUB) Act
- Bill Number
- H.R. 2692
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-04-07: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-07-03T08:05:52Z
AI-Generated Summary
Purpose of the Legislation
The "No Tax Breaks for Union Busting (NTBUB) Act" (H.R. 2692) aims to eliminate tax deductions for employer expenses that attempt to influence employees' decisions about joining, supporting, or engaging in activities with labor unions (also called labor organizations). It seeks to remove what the bill describes as a taxpayer subsidy for employer efforts that may interfere with workers' rights to organize and collectively bargain, as protected under federal labor laws like the National Labor Relations Act (NLRA) and the Railway Labor Act (RLA).
Key Provisions
- Denial of Tax Deductions: Amends Section 162(e)(1) of the Internal Revenue Code (IRC) to disallow deductions for any costs related to influencing employees' opinions or actions regarding labor unions or union-related activities, such as elections, disputes, or collective bargaining.
- Definitions:
- "Labor organization" refers to unions as defined in the Labor-Management Reporting and Disclosure Act (LMRDA).
- "Labor organization activity" includes union elections (under NLRA Section 9 or RLA Section 2), labor disputes (as defined in LMRDA), collective actions (like bargaining or other rights under NLRA Section 7 or the RLA), and other activities specified by the Treasury Secretary.
- What Counts as Non-Deductible Expenses (under new IRC Section 162(e)(4)(D)):
- Costs leading to National Labor Relations Board (NLRB) complaints or settlements for unfair labor practices (e.g., firing workers for union activity or refusing to bargain in good faith under NLRA Section 8(a)).
- Expenses for producing, conducting, or attending meetings/trainings where union topics are discussed with potentially union-eligible employees.
- Payments required to be reported under the LMRDA (e.g., consultant fees for anti-union advice).
- Includes direct payments, wages, and general administrative costs tied to these activities.
- Exceptions to Non-Deductibility:
- Good-faith negotiations with certified union representatives.
- Required communications with shareholders under securities laws.
- Costs for voluntarily recognizing a union.
- Expenses for operating labor-management partnerships or grievance procedures in existing collective bargaining agreements.
- Payments made by unions themselves.
- Legally required postings or notices about worker rights.
- Costs from NLRB complaints that are fully overturned.
- Regulatory Guidance: The Treasury Secretary must issue rules within 240 days of enactment to implement the changes, including how to handle deductions for overturned complaints.
- Reporting Requirements:
- Employers must include details of these expenditures (e.g., dates, amounts, types of activities, LMRDA disclosures) with their tax returns.
- Third parties (e.g., consultants) performing these activities for employers must file separate reports with similar details.
- Penalties for Non-Compliance (new IRC Sections 6720D and 6039K):
- Employers: Minimum $10,000 fine per failure, or $1,000 per full-time equivalent employee (whichever is greater); additional fines for ongoing failures up to $100,000 total.
- No penalty if due to reasonable cause (not willful neglect).
- Third-party filers face existing IRC penalties for failures.
- Effective Date: Applies to expenses in tax years starting more than 240 days after enactment.
Significant Changes to Existing Law
- Expansion of Non-Deductible Expenses: Previously, IRC Section 162(e) only disallowed deductions for lobbying and certain political activities. This bill adds employer anti-union influence efforts to that list, treating them similarly to electioneering spending.
- New Reporting Mandates: Introduces required disclosures on tax returns and third-party filings for these specific labor-related expenditures, which were not previously tracked or penalized under tax law. This builds on but does not alter existing labor reporting under the LMRDA or NLRB processes.
- Conforming Updates: Changes headings in IRC Section 162(e) to include "labor organization expenditures" alongside lobbying and political ones.
Potential Impacts
- On Government Agencies: The IRS and Treasury Department will gain enforcement responsibilities, including processing new reports and issuing guidance, potentially increasing administrative workload. The NLRB may see indirect effects, as more employer actions could lead to complaints tied to non-deductible costs, but no direct changes to NLRB operations.
- On Citizens (Workers and Employees): Could reduce financial incentives for employers to oppose unions, potentially leading to freer worker choices in organizing and bargaining, aligning with NLRA/RLA goals of protecting association rights.
- On Businesses and Employers: Raises the after-tax cost of anti-union activities (e.g., consultants, meetings) by eliminating deductions, which might discourage such spending. Adds compliance burdens through reporting and penalties, especially for larger firms.
- On International Relations: No direct impacts; the bill focuses on domestic tax and labor policy.
Main Stakeholders Affected
- Employers/Businesses: Primary targets, as they lose tax benefits and face new reporting/penalty requirements for labor influence activities.
- Workers/Employees: Beneficiaries, with potentially less employer interference in union decisions, supporting their rights under federal labor laws.
- Labor Unions/Organizations: Gain from reduced employer opposition, making collective actions easier without subsidized counter-efforts.
- Third-Party Consultants/Advisors: Must report services provided to employers (e.g., anti-union training), increasing transparency and potential liability.
- Taxpayers Generally: May see indirect benefits if reduced deductions lead to higher corporate tax revenue, though minimal overall fiscal impact.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Reinforces federal labor policies (NLRA, RLA, LMRDA) by using tax law to discourage practices like captive audience meetings or unfair labor practices, without altering those underlying laws. Ties tax deductibility to NLRB outcomes, creating a financial disincentive for violations. The Treasury's rulemaking authority allows flexibility but could lead to disputes over what qualifies as "influencing."
- Constitutional Implications: Focuses on tax treatment of expenses rather than restricting speech or association directly, so it avoids First Amendment challenges seen in some lobbying rules. However, it could face arguments that it unfairly burdens employer communications, though exceptions (e.g., for negotiations) mitigate this.
- Political Implications: Advances pro-worker policies by addressing employer spending on union opposition (estimated at $340 million annually on consultants), potentially shifting power dynamics in labor relations. As a bipartisan-introduced bill (though with a pro-labor tilt), it highlights ongoing debates over union rights versus business freedoms, but remains neutral in application to all qualifying activities.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Norcross, Donald [D-NJ-1]
Cosponsors (134)
Rep. Boyle, Brendan F. [D-PA-2], Rep. Chu, Judy [D-CA-28], Rep. Smith, Adam [D-WA-9], Rep. Green, Al [D-TX-9], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Adams, Alma S. [D-NC-12], Rep. Craig, Angie [D-MN-2], Rep. McClain Delaney, April [D-MD-6], Rep. Balint, Becca [D-VT-At Large], Rep. McCollum, Betty [D-MN-4], Rep. Foster, Bill [D-IL-11], Rep. Sherman, Brad [D-CA-32], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Pingree, Chellie [D-ME-1], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Houlahan, Chrissy [D-PA-6], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Goldman, Daniel S. [D-NY-10], Rep. Davis, Danny K. [D-IL-7], Rep. Soto, Darren [D-FL-9], Rep. Dingell, Debbie [D-MI-6], Rep. Wasserman Schultz, Debbie [D-FL-25], Rep. Ramirez, Delia C. [D-IL-3], Rep. DeGette, Diana [D-CO-1], Rep. Titus, Dina [D-NV-1], Rep. Evans, Dwight [D-PA-3], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Cleaver, Emanuel [D-MO-5], Rep. Sykes, Emilia Strong [D-OH-13], Rep. Sorensen, Eric [D-IL-17], Rep. Mrvan, Frank J. [D-IN-1], Rep. Pallone, Frank [D-NJ-6], Rep. Wilson, Frederica S. [D-FL-24], Rep. Latimer, George [D-NY-16], Rep. Connolly, Gerald E. [D-VA-11], Rep. Cisneros, Gilbert Ray, Jr. [D-CA-31], Rep. Meng, Grace [D-NY-6], Rep. Casar, Greg [D-TX-35], Rep. Stevens, Haley M. [D-MI-11], Rep. Johnson, Henry C. "Hank" [D-GA-4], Rep. Cuellar, Henry [D-TX-28], Rep. Conaway, Herbert [D-NJ-3], Rep. Omar, Ilhan [D-MN-5], Rep. Hayes, Jahana [D-CT-5], Rep. Schakowsky, Janice D. [D-IL-9], Rep. Golden, Jared F. [D-ME-2], Rep. Nadler, Jerrold [D-NY-12], Rep. Tokuda, Jill N. [D-HI-2], Rep. McGovern, James P. [D-MA-2], Rep. Gomez, Jimmy [D-CA-34] and 84 more
Recent Actions
- 2025-04-07: Referred to the House Committee on Ways and Means.
- 2025-04-07: Introduced in House
- 2025-04-07: Introduced in House
Bill Versions
- No Tax Breaks for Union Busting (NTBUB) Act — issued 2025-04-07 — PDF (18 pages)