UPDATE Reps. Jimmy Panetta (D-CA) and Mike Kelly (R-PA), joined by Reps. Terri Sewell (D-AL) and Drew Ferguson (R-GA), recently introduced the Broadband Grant Tax Treatment Act. The bipartisan legislation would amend the Internal Revenue Code to ensure that funding directed for broadband deployment from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) would not be considered taxable income.
The House legislation is a companion bill to one previously introduced in the Senate by Senators Mark Warner (D-VA) and Jerry Moran (R-KS), and joined by Sens. Tim Kaine (D-VA), Roger Wicker (R-MS), Rev. Raphael Warnock (D-GA), and Shelley Moore Capito (R-WV).
Grants awarded to industry for the purposes of broadband deployment are currently factored into a company’s income and will soon be subjected to additional taxes due to scheduled changes to the corporate tax code that begin next year, Inside Towers reported. In response to this issue, the legislation excludes broadband deployment grants awarded through the IIJA and ARP from an organization’s income, ensuring that all the federal dollars awarded to companies for broadband deployment are used for that purpose.
Lobbying organizations praised the bill. “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 Owens, SVP for Government and Industry Affairs for WTA – Advocates for Rural Broadband. WTA strongly urges Congressional leadership to address this issue quickly.”
CTIA SVP Government Affairs Kelly Cole said: “Taxing broadband grants – requiring recipients to pay back to the government a portion of what they receive from the government – would 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 CEO Shirley Bloomfield said it’s critical that all broadband grant funds go toward their intended purpose of network deployment. USTelecom President/CEO Jonathan Spalter agrees, noting that closing America’s digital divide “will require every cent of the $65 billion Congress has dedicated for that critical purpose.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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