No Tax Breaks for Union Busting (NTBUB) Act
- Bill Number
- S. 1310
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-04-04: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-01-10T07:07:50Z
AI-Generated Summary
Purpose of the Legislation
The No Tax Breaks for Union Busting (NTBUB) Act seeks to eliminate tax deductions for employer expenses that aim to influence employees' decisions about joining labor unions (also called labor organizations) or participating in related activities, such as collective bargaining. By doing so, it removes taxpayer subsidies for these efforts, aligning tax rules with federal labor laws that protect workers' rights to organize freely without employer interference.
Key Provisions
- Denial of Tax Deductions: Amends Section 162(e) of the Internal Revenue Code (IRC) to disallow deductions for any employer spending intended to sway employees' opinions or actions regarding labor organizations or activities. This includes costs for meetings, training, surveillance, or hiring consultants to discourage unionization.
- Definitions:
- Labor organization: Refers to unions as defined under the Labor-Management Reporting and Disclosure Act (LMRDA).
- Labor organization activity: Covers union elections, labor disputes (conflicts over working conditions), collective actions (like bargaining or strikes protected under the National Labor Relations Act (NLRA) or Railway Labor Act (RLA)), and other related efforts identified by the Treasury Secretary.
- What Counts as Non-Deductible Expenses:
- Costs linked to unfair labor practices (e.g., firings or coercion leading to charges by the National Labor Relations Board (NLRB)), settlements of such charges, or court findings of interference under the RLA.
- Expenses for "captive audience" meetings (mandatory employee sessions discussing unions) or trainings involving potential union members.
- Payments reported under the LMRDA, such as for anti-union consultants.
- Exceptions to Non-Deductibility:
- Good-faith negotiations with elected employee representatives.
- Required communications with shareholders under securities laws.
- Voluntary recognition of a union, operations of existing labor-management partnerships or grievance procedures under collective bargaining agreements.
- Legally required postings or communications about worker rights.
- Expenses by unions themselves or complaints fully dismissed by the NLRB.
- Reporting Requirements:
- Employers must include details of these expenditures (e.g., dates, amounts, types of activities) on their tax returns. Failure triggers penalties starting at $10,000 or $1,000 per full-time employee, escalating to $100,000 maximum for prolonged non-compliance.
- Third parties (e.g., consultants) conducting such activities must report to the IRS, including who hired them and activity details, with penalties for failures.
- A "reasonable cause" defense applies if errors are unintentional and not negligent.
- Implementation:
- The Treasury Secretary must issue guidance or regulations within 240 days of enactment.
- Changes apply to taxable years starting 240 days after enactment.
Significant Changes to Existing Law
- Expands IRC Section 162(e), which previously denied deductions only for lobbying (influencing legislation) and certain political spending, to now include employer efforts to influence union-related decisions—treating them similarly as non-deductible "lobbying" of employees.
- Introduces new mandatory reporting under IRC Sections 6720D and 6039K for these specific activities, which did not exist before, increasing transparency and enforcement.
- Adds regulatory authority for the Treasury to define additional activities and handle timing of deductions (e.g., for dismissed complaints).
Potential Impacts
- On Government Agencies: The IRS gains new enforcement duties for deductions and reporting, potentially increasing administrative workload. The NLRB and courts may see indirect effects, as non-deductible costs could deter unfair labor practices, though the bill does not alter labor enforcement directly. No notable impacts on international relations.
- On Citizens (Workers and Taxpayers): Workers may face less employer pressure during union drives, supporting freer choices under labor laws. Taxpayers overall benefit from reduced subsidies for anti-union efforts, though individual workers are not directly taxed.
- On Businesses: Employers, especially those resisting unions, will pay higher taxes on related spending (e.g., the $340 million annually cited for consultants), possibly reducing such activities and increasing costs for compliance and reporting.
Main Stakeholders Affected
- Employers: Primary targets; larger firms with 61+ employees (where over 54% of union elections face charges, per findings) will bear the brunt of lost deductions and reporting penalties.
- Employees and Workers: Benefit from potentially reduced interference, aligning with NLRA/RLA protections for organizing and bargaining.
- Labor Unions: Gain an advantage as employer opposition becomes costlier without tax breaks, promoting collective bargaining.
- Consultants and Third Parties: Face new reporting obligations and penalties for anti-union work.
- Government and Taxpayers: IRS enforces rules; broader public sees less use of tax dollars to fund employer influence over worker rights.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces federal labor policies (NLRA, RLA, LMRDA) by using tax law to discourage violations without creating new labor penalties. It treats anti-union spending like political lobbying, promoting consistency in non-deductible "influence" activities, but relies on Treasury regulations for clarity to avoid disputes.
- Constitutional: No direct challenges; as a tax adjustment, it does not infringe on free speech (protected employer communications remain deductible if in good faith) and supports workers' associational rights under the First Amendment via reduced subsidies.
- Political: Introduced by a bipartisan group but led by Democrats, it reflects priorities to strengthen worker protections amid findings of frequent employer violations (e.g., 40% of elections with charges). Could spark debate on balancing business costs with labor rights, potentially influencing future tax and labor reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (29)
Sen. Smith, Tina [D-MN], Sen. Booker, Cory A. [D-NJ], Sen. Baldwin, Tammy [D-WI], Sen. Blumenthal, Richard [D-CT], Sen. Cortez Masto, Catherine [D-NV], Sen. Duckworth, Tammy [D-IL], Sen. Durbin, Richard J. [D-IL], Sen. Fetterman, John [D-PA], Sen. Gallego, Ruben [D-AZ], Sen. Heinrich, Martin [D-NM], Sen. Hirono, Mazie K. [D-HI], Sen. Klobuchar, Amy [D-MN], Sen. Markey, Edward J. [D-MA], Sen. Merkley, Jeff [D-OR], Sen. Murphy, Christopher [D-CT], Sen. Murray, Patty [D-WA], Sen. Padilla, Alex [D-CA], Sen. Reed, Jack [D-RI], Sen. Rosen, Jacky [D-NV], Sen. Sanders, Bernard [I-VT], Sen. Schatz, Brian [D-HI], Sen. Schiff, Adam B. [D-CA], Sen. Slotkin, Elissa [D-MI], Sen. Van Hollen, Chris [D-MD], Sen. Warren, Elizabeth [D-MA], Sen. Whitehouse, Sheldon [D-RI], Sen. Wyden, Ron [D-OR], Sen. Welch, Peter [D-VT], Sen. Blunt Rochester, Lisa [D-DE]
Recent Actions
- 2025-04-04: Read twice and referred to the Committee on Finance.
- 2025-04-04: Introduced in Senate
Bill Versions
- No Tax Breaks for Union Busting (NTBUB) Act — issued 2025-04-04 — PDF (17 pages)