WASHINGTON – U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) introduced legislation to amend the Internal Revenue Code to make certain that funding, recently passed by Congress, for the deployment of broadband will not be considered taxable income.
Grants awarded to industry for the purposes of broadband deployment are currently factored into a company’s income and will soon be subject to additional taxes due to scheduled changes to the corporate tax code that kick in beginning next year. This new bipartisan legislation moves to exclude broadband deployment grants awarded through the IIJA and ARP from an organization’s income, ensuring the entirety of federal dollars awarded to companies for the purpose of deploying broadband around the country can be used wholly for that purpose, rather than making their way back to the government through taxes.
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth or pursue an education,” said Sen. Moran. “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.”
“In order to fully reap the benefits of the Infrastructure Investment and Jobs Act and the American Rescue Plan, every dollar that was set aside to fund broadband expansion and deployment should be used for that purpose,” said Sen. Warner. “Taxing these broadband investments awards would be counter-productive, and could ultimately diminish efforts to give more Americans access to high-speed internet.”
“We are grateful that Congress committed tens of billions of dollars to broadband deployment grants through recent bills seeking to help close the digital divide in our country,” said Chief Executive Officer of NTCA Shirley Bloomfield. “But taxing broadband grants – requiring recipients to pay back to the government a portion of what they receive from the government – will dramatically reduce the impact of these programs and likely leave the hardest-to-reach communities without essential connectivity for even longer. It is critical that all broadband grant funds go toward their intended purpose of network deployment. NTCA is proud to support the Broadband Grant Tax Treatment Act, and on behalf of our members, I want to thank Senators Warner and Moran for introducing the bill. This legislation will maximize the impact of every dollar granted for broadband deployment and further the mission of getting every American connected.”
“The federal government is making an enormous investment in rural broadband, but the effects of the tax code make it harder for the small, locally-based broadband providers we represent to maximize the amount of funding going to build out the network,” said Derrick B. Owens, Senior Vice President for Government and Industry Affairs for WTA - Advocates for Rural Broadband. “We applaud the Senators for introducing this bipartisan legislation, which would streamline the tax code so that we’ll get as much broadband built as quickly as possible."
# # #