U.S. Sens. Mark Warner (D-VA) and Jerry Moran (R-KS) introduced a bill in the Senate that would amend the Internal Revenue Code to ensure that funding for broadband deployment from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) will not be considered taxable income.
Currently, grants awarded for the purposes of broadband deployment are factored into a company’s income and are subject to taxation. This legislation – the Broadband Grant Tax Treatment Act (BGTTA) – would exclude broadband deployment grants awarded through the IIJA, ARP, and Tribal Broadband Connectivity Fund from an organization’s income. This helps to ensure that the entirety of federal dollars awarded to companies for the purpose of deploying broadband can be used wholly for that purpose.
“We have made significant strides to ensure that access to high-speed internet is available to more Americans than ever,” Warner said. “But taxing broadband investment awards diminishes our efforts. This legislation ensures that individuals and businesses are able to reap the benefits of every dollar set aside for broadband expansion and deployment so that we can accomplish our goal of bringing reliable broadband to every corner of Virginia.”
The bill is cosponsored by Sens. Tim Kaine (D-VA), Roger Wicker (R-MS), Raphael Warnock (D-GA), Kevin Cramer (R-ND), Joe Manchin (D-WV), Shelley Moore Capito (R-WV), Angus King (I-ME), James Risch (R-ID), Mark Kelly (D-AZ), Tommy Tuberville (R-AL), Kyrsten Sinema (I-AZ), Lisa Murkowski (R-AK), Bob Menendez (D-NJ), Michael Bennet (D-CO), and Tammy Baldwin (D-WI).
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth, or pursue an education,” Moran said. “This commonsense legislation would make certain federal grants provided for broadband deployment are not counted as taxable income to maximize the impact and success of these resources.”
A companion bill was introduced in the House by U.S. Reps. Mike Kelly (R-PA) and Jimmy Panetta (D-CA).
“Although we were able to pass legislation last Congress providing major investments in our nation’s broadband, many small businesses who get that federal funding to construct networks and connect our homes may face steep taxes,” Panetta said. “The Broadband Grant Tax Treatment Act would exempt those grants from federal taxation and ensure that the funding is allocated for universal broadband.”
Cosponsors in the House are U.S. Reps. Terri Sewell (D-AL), Drew Ferguson (R-GA), Buddy Carter (R-GA), and Dan Kildee (D-MI).
“More than 800,000 Pennsylvanians, including 520,000 rural Pennsylvanians, lack quality broadband internet access,” Kelly said. “This bill will not only help to change to that, but it will also work to make that access more affordable.”