Zack Richner, founder of Easy Tax Credits and third-generation community newspaper owner, demystifies the Employee Retention Tax Credit (ERTC) and its potential benefits for news organizations. Zack explains how his company assists businesses, including newspapers, in applying for the ERTC, and how this process can generate substantial referral revenue. The discussion delves into the specifics of the tax credit, the application timeframe, and the overall benefits for newsrooms.
Episode chapters:
(02:03) – ERTC program for newsrooms and Zack’s newspaper background
(04:56) – How ERTC works
(09:24) – Newsroom success in generating revenue by helping local businesses
(12:46) – How newsrooms are promoting program, what types of communities have seen success, and timeframes
(16:43) – How to sign up
Listen to the episode here:
Links:
- Local News Matters: web, Twitter, Facebook, LinkedIn
- Colorado Press Association: web, Twitter, Facebook
- Tim Regan-Porter: bio, Twitter
Bio:
Zachary Richner is the Founder and Managing Partner of Arrandale Ventures, a mission-driven, strategic venture capital firm that is creating a truly innovative and sustainable business model for local media companies. Now more than ever, it is critical for the health of our democracy to have an independent and vibrant free press. Zack has successfully invested in startups through his family’s three-generation media firm, Richner Communications, Inc. (RCI), which is one of the largest local content providers in New York State. By leveraging RCI’s core competencies—trusted community relationships with consumers and businesses—he has generated outsize returns on these investments through a uniquely accretive performance equity model. Zack further honed his venture investing skills at Fifth Wall Ventures, where he not only evaluated early-stage companies but also developed strategy for new funds. Zack has been repeatedly recognized at the national and local levels for his leadership growing and scaling nascent organizations in innovative ways. He has spent extensive time in high-profile public sector roles, including serving in the White House Office of the Chief of Staff, working as director of the $1 billion NY Rising Community Reconstruction Program and managing the largest state budget in campaign history as Ohio Budget Director for the Obama 2012 campaign. A graduate of Harvard College, Zack received an MBA from Northwestern University – Kellogg School of Management and an MS Design Innovation from Northwestern University – McCormick School of Engineering. He is a NEXUS Global delegate and serves on the Kellogg Admissions Leadership Council.
Full transcript:
(recorded via Riverside.fm; transcript automated via Castmagic.io, lightly edited)
Zack Richner [00:00:00]:
We're working with hundreds of newspapers throughout the US right now. Some of them are on pace to do over a million dollars in commission. And it's—you know, coming from a newspaper business myself, we really wanted to set it up in a way that was as easy as possible for our media partners.
Tim Regan-Porter [00:00:29]:
Welcome to the Local News Matters podcast, where we explore pathways to stronger journalism, better businesses, and healthier communities. I'm Tim Regan-Porter, CEO of the Colorado Press Association. In each episode, I sit down with guests from newsrooms and others in the local news ecosystem to highlight the innovative work of local newsrooms and those that support them, as well as the crucial questions they face.
This episode is for owners, publishers and those on the revenue side of newsrooms. You have probably been inundated with offers to help you navigate the complex world of tax credits. But today, we're bringing you a conversation that's not just about tax credits, it's about a unique opportunity tailored specifically for news organizations.
Our guest is Zack Richner, who grew up in the local newspaper business and has a deep understanding of the challenges and opportunities it presents. Zack's company, Easy Tax Credits, has been helping businesses apply for the Employee Retention Tax Credit, or ERTC, which can be worth up to $26,000 per employee.
But here's the twist: Easy Tax Credits isn't just helping businesses apply for the ERTC, they're also working with newspapers to help their advertising clients apply for the credit. And in the process, these newspapers are earning substantial referral revenue.
So, if you're a publisher or salesperson who's been skeptical about the barrage of offers to help with tax credits, we're not just talking about a tax credit. We're talking about an opportunity for your organization to help your advertising clients, to build stronger business relationships, and to earn additional revenue.
ERTC program for newsrooms and Zack’s newspaper background
Regan-Porter [00:02:03]:
Welcome, Zack. Pleasure to have you.
Richner [00:02:05]:
Tim, great to be here.
Regan-Porter [00:02:07]:
So I ask you on here—this might be a bit odd for people just seeing Easy Tax Credits on the Local News Matters podcast, but I first learned of you because you spoke to the Rebuild Local News Coalition, and then I had you speak to folks from the Colorado Press Association and Colorado News Collaborative. So this is going to be about the ERTC, but it's also going to be about why newsrooms need to know not only about the tax credit for themselves, but about how they can work with your company in helping some of their advertising clients and get some revenue for themselves. So why don't we start actually with you telling me a little bit about your background and why you are doing a special program for newsrooms related to ERTC.
Richner [00:02:59]:
Yeah, so I grew up in the local newspaper business. My grandparents started a newspaper in Long Island, New York, back in 1964. The company is called Richner Communications, and today we have over two dozen publications, hyperlocal weekly publications. And during the pandemic, a lot of our customers, both on the advertising side and commercial printing side, were struggling, understandably, to survive. So we took it upon ourselves at Richner to find different ways that we could be helpful to our customers. And one of the ways was trying to find them federal funding. So we would ask our customers, hey, did you get your PPP loans? And the answer was almost always yes. And then we would say, well, what about your employee retention tax credit? And we often got a blank stare, I think almost always. So we started helping our customers apply for the ERTC. And what that is, it's a tax credit of up to $26,000 per employee. So it can be fairly lucrative. A small ten person company can be seeing $260,000 of funding. So once we realized how much we could be helpful to our existing customers, we wanted to professionalize this. So we hired off attorneys and accountants to join a team that we called Easy Tax Credits. And at some point, we realized that this could be helpful to other newspaper companies as well. So we started rolling it out to other newspaper companies where they can offer it to their customers and clients and receive a commission for doing so. So that's how it started.
How ERTC works
Regan-Porter [00:04:56]:
Great. So I want to delve a little more into what you're seeing on the newsroom side in terms of working with clients, but let's step back and talk about the basics of the tax credit. And one of the things I think we should hit up front, because I hear this from some of the people I talk to, because we're getting bombarded with companies that want to help you with your ERTC. I get emails and actual mail all the time. And a number of publishers and business owners that I've talked to have said, well, I've talked to my accountant, and they said I don't qualify. And from what I understand from you, that doesn't necessarily mean they don't qualify. So can you talk a little bit about why someone should maybe consider working with someone who specializes in this?
Richner [00:05:42]:
Yeah. So about 30% of the clients that we have successfully helped were told by their accountants that they don't qualify. This legislation has changed dramatically since it was first introduced. So a lot of times there's misinformation out there. And I want to be clear that is not to say that the accountant is not of the highest caliber. Like, we work with some amazing accountants. This is just a really complex one time tax credit that's hundreds of pages of law, and in many ways, and we can talk about the different ways you qualify, it's really much more of a legal program opposed to an accounting program, which is why we have a team of lawyers on board. So I like to think of it as if you had a hard problem, you could go to your general practitioner and they can probably give you an overview but you really need to go to a cardiologist and we're that cardiologist in this situation. So that's how we encounter this.
Regan-Porter [00:06:52]:
Great. And so can you just quickly kind of summarize the major points that how does the tax credit work and you mentioned the total amount but without going into all of the details because I know it's very complicated. Just an overview of how this works.
Richner [00:07:10]:
Sure. So there's really two main ways to qualify. The first way is having a reduction in revenue quarter over quarter between 2019 and 2000 and 22,019 and 2021. You can qualify on a quarter by quarter basis. So we look at each quarter of those two years and compare that to the same quarter back in 2019. And if you have a reduction of a certain amount it's either 50% or 20% depending on the quarter you would qualify. Similarly, where we see about two thirds of all of our businesses qualify is through the government shutdown method. And that is looking at whether a government shutdown either affected you directly where your company was shut down or changed the way that you did business in what the IRS is a material way and there's a definition of what that is. So government shutdown can be that you were shut down yourself or some sort of government mandate negatively impacted the way you do business in a material way, which the IRS has defined what that means. But a good example is a restaurant that stayed in business, they stayed open but they could no longer do dine in services so now they had to transition exclusively to takeout and delivery. So those are the two ways that folks qualify. So reduction in revenue and government mandated shutdown, we look at both ways and like I said, it is much more of a legal program because the accounting way is very straightforward. Well, I don't want to say very straightforward, but there's a lot of nuances, but it's more straightforward whereas the government shutdown really takes understanding all the various federal, state and local shutdown orders and delving into your operations before and after the pandemic and comparing that to the federal legislation.
Newsroom success in generating revenue by helping local businesses
Regan-Porter [00:09:24]:
So tell me a little bit more about what your experience has been with the newspaper program and getting newspapers to work with their customers and helping them get set up. Have you had good success?
Richner [00:09:37]:
So first of all, we've worked with a lot of newspaper companies themselves on getting them the employee retention tax credit. A lot of times, unfortunately, newspapers did have that reduction in revenue but even if they didn't they might have had an events division that was shut down which might qualify them or their sales teams and reporters could no longer go out in the field the same way. So there's lots of ways for newspapers themselves to qualify and in many cases for millions of dollars and those funds can, unlike the PPP loan, can be used on anything and don't need to be repaid. So that's something that's really different about the ERTC. The funds can be used for anything and don't need to be repaid. But our local media partner program has been a real success. We're working with hundreds of newspapers throughout the US right now. Some of them are on pace to do over a million dollars in commission. And coming from a newspaper business myself, we really wanted to set it up in a way that was as easy as possible for our media partners and that meant providing all of the material. So we have camera ready ads, we have collateral for the sales teams, for the small businesses and we do not expect the salespeople to get into any details at all about tax credits. We know it's hard enough to get print reps to sell digital ads. Certainly it would be almost impossible to get them to sell a tax credit. So all we ask is that the reps leverage their relationships that they've had for decades and have a small business sign up on our website or call our phone number. The website is easytaxcredits.com, the phone number is 1234 credits and then we take it from there. And at that point, if a small business goes through our process and gets back the money, we provide a commission to the newspaper of 20% of our fee. So our fee is typically 20%, so 20% of 20% is 4%. So to go back to that example I used earlier on the podcast of a ten person firm can get up to $26,000 a newspaper. 4% of that is $10,000 for just having them go to a website and enter their contact information. So pretty good deal for the newspaper. It also, of course engenders incredible goodwill and it's in our mind a way that newspapers should be thinking going forward, which is how can we leverage our brand and the trust we've built in the community and the resources we already have in place, which in this case is their sales teams.
How newsrooms are promoting program, what types of communities have seen success, and timeframes
Regan-Porter [00:12:46]:
And are you seeing newspapers run print ads for this? Send out emails to their clients that bring it up on sales calls? What sort of the range of ways you have seen this working?
Richner [00:12:58]:
We have partners that do all of the above, none of the above. We really leave it up to them. We provide all the material to do any of what you just mentioned. So we have dozens of different ad creative in tabloid and broadsheet sizes we have leave behinds, we have bill stuffers for putting in invoices that you might send out and then of course we have a script, very short, three sentences long to equip your salespeople with. Something that we are doing at easy tax credits is not only are we paying that 20% commission to the business, but if a media partner decides to engage their sales team. We'll actually provide that salesperson with a $500 spin. So it's a really great way to get the sales team excited. We've heard that it's a great business development opportunity for sales reps because now they can get in the door to some clients that might not be advertising with the paper and offer them this new product and explain that there's all these other products that the local newspaper offers. And to that end, we really encourage our media partners to offer $1,000 of free advertising to businesses that sign up with Easy Tax Credits. We don't require it, but we feel that that's something that really helps us as an industry stand out versus maybe some of the other firms that are offering some of these same tax credit services is our ability to offer this marketing. And we all know that it doesn't really cost us $1,000. A marginal ad doesn't cost us much at all. So then when you compare that to the thousands and thousands of dollars you're going to get from that credit, it really makes sense to provide that incentive.
Regan-Porter [00:14:59]:
Have you seen this work in small towns with weeklies and metro dailies? What's sort of the range of newsrooms that have you seen success with this?
Richner [00:15:07]:
I don't think we have any large metro dailies at this point. We have some metro weeklies, we have some suburban and rural dailies, but so it really does span every type of frequency and geographic area. We work with businesses of between five and 500 people and every size business doesn't matter the size of the business, there are still a lot of businesses out there that have not taken advantage of this tax credit.
Regan-Porter [00:15:43]:
And is there any time frame that companies need to go back and apply for this?
Richner [00:15:49]:
Sorry, I'll start over. So this is really a tax credit against your 2000 and 2021 taxes. So what we do at Easy Tax Credits is we actually amend, we do all the paperwork, fill everything out, we amend your 2000 and 2021 payroll taxes and there is a time limit on how long you have to amend taxes. That really starts as it relates to this program, the beginning of next year, the beginning of 2024. So we're trying to get everybody in the door as soon as possible. Also because it is taking the IRS six to twelve months to get the checks back to people. We're hoping that that speeds up, but of course it could also go in the other direction where it slows down. But right now it's about six to twelve months to get the check back from the IRS.
How to sign up
Regan-Porter [00:16:43]:
And if someone wants to inquire about the partner program or just the tax credit itself, how would they do that?
Richner [00:16:51]:
Sure. So on the tax credit side for their own company, I'd encourage them to sign up on our website, easytaxcredits.com, or call us at 1(234) CREDITS. And then if they're interested in the media partner program, they can just simply email mediapartners@easytaxcredits.com. So that's easytaxcredits.com.
Regan-Porter [00:17:24]:
And we actually have an affiliate code there, too, so people want to put that in when they apply, fill out the form, COPRESS, and that'll give us a little credit for that. But we really wish we wanted to get the word out to newsrooms, because they might be missing out on money from the credit itself. And there's also a great opportunity to earn some income and help their own clients, as you said, build goodwill by helping them get money.
Richner [00:17:53]:
And I know, having been in the newsroom and with sales teams, that there's always hesitancy to introduce a new product. It's just one more thing to sell. But I think if anybody listening speaks to some of our current media partners, they'll hear that this was incredibly easy for their sales reps if they went the sales reps route. And the sales reps were actually really excited to get those spits, those $500 spiffs from us.
Regan-Porter [00:18:26]:
Well, thank you for your time, Zack.
Richner [00:18:28]:
Thank you so much, Tim. Thanks for having me on.
Regan-Porter [00:18:32]:
Thank you for listening to the Local News Matters podcast, and thanks to Zack for your time and for your work with publishers.
A final thanks to our production partners at Pirate Audio. Pirate Audio believes every community deserves great things to listen to, and they are on a mission to help local newsrooms reach their communities via audio. If you're interested in starting a podcast or need production support for an existing one, let me know and I'll be happy to connect you.
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