WIA President/CEO Jonathan Adelstein urged lawmakers to avoid including a “book alternative minimum tax provision for spectrum licenses” in any potential alternative to last year’s Build Back Better bill. Applying a book alternative minimum tax to spectrum acquisition costs would create a 15 percent tax on the licenses needed to deploy America’s 5G networks, slowing down investment and progress towards the country’s connectivity goals, he notes.
“Book income” is defined as the adjusted financial statement income of large corporations, according to the Tax Policy Center.
Adelstein urged lawmakers to continue the current tax treatment of federal spectrum licenses, which allows companies that acquire licenses at FCC auctions to amortize these auction costs over a 15-year period. “The book alternative minimum tax provision in last year’s Build Back Better bill would have changed this tax treatment—spectrum licenses would be considered indefinite-lived assets under tax law, and the purchase of these licenses would receive no deduction for book income purposes,” Adelstein states in a letter to House and Senate Democratic Congressional leadership.
Wireless providers spend tens of billions of dollars on spectrum licenses, making these assets one of the most cost-intensive components of wireless networks, according to the WIA executive. “At a time when Congress is prioritizing the expansion of broadband infrastructure across the country, changing the current tax treatment would represent a retreat in the march towards reaching the nation’s connectivity goals,” he states.
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