Rep. Kelly, colleagues introduce "Broadband Grant Tax Treatment Act" to expand broadband internet access
WASHINGTON, D.C. – Today, U.S. Reps. Mike Kelly (R-PA-16) and Jimmy Panetta (D-CA-19), along with U.S. Sens. Mark Warner (D-VA) and Jerry Moran (R-KS), reintroduced the Broadband Grant Tax Treatment Act (BGTTA) — legislation 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. This legislation was first introduced last Congress in both the House of Representatives and the Senate with bipartisan support.
Reps. Drew Ferguson (R-GA), Buddy Carter (R-GA), Terri Sewell (D-AL), and Dan Kildee (D-MI) are original co-sponsors. The bill number in the U.S. House is H.R. 889.
Grants awarded for the purposes of broadband deployment are currently factored into a company’s income and are subject to taxation. This bipartisan, bicameral legislation moves to exclude broadband deployment grants awarded through the IIJA, ARP, and Tribal Broadband Connectivity Fund 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.
“More than 800,000 Pennsylvanians, including 520,000 rural Pennsylvanians, lack quality broadband internet access,” said Rep. Kelly, Chairman of the Ways & Means Committee’s Subcommittee on Tax. “This bill will not only help to change that, but it will also work to make access more affordable. It also ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment. Internet connectivity brings together all Americans; it strengthens small businesses and E-Commerce; and it expands educational opportunities for our children. This legislation allows for existing grant funding to be spent as effectively as possible to help all American families from farm communities in California to the shores of the Great Lakes in Pennsylvania.”
“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,” said Rep. Panetta. “The Broadband Grant Tax Treatment Act would exempt those grants from federal taxation and ensure that the funding is allocated for universal broadband. We will continue to work across the aisle in the House and across the U.S. Capitol with Senators to close the digital divide with investment and incentives that will bolster connectivity for every American.”
“We have made significant strides to ensure that access to high-speed internet is available to more Americans than ever,” said Sen. Warner, a member of the Finance Committee that oversees the nation’s tax code and a primary author of the broadband provisions in the IIJA and ARP. “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.”
“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.”
Joining Sens. Warner and Moran as co-sponsors are Sens. Tim Kaine (D-VA), Roger Wicker (R-MS), Rev. 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). Original co-sponsors in the House of Representatives are U.S. Reps. Terri Sewell (D-AL-07), Drew Ferguson (R-GA-03), Buddy Carter (R-GA-01), and Dan Kildee (D-MI-08).
WHAT THEY'RE SAYING:
“Grant funding should be free from taxation to ensure all broadband grants awarded can be used to reach Americans with connectivity needs. Many rural and underserved communities will see great benefit from enhanced wireless broadband services, and every dollar granted should be used for that purpose,” said Competitive Carriers Association President & CEO Tim Donovan.
"To achieve universal connectivity, Congress must eliminate this unnecessary tax to ensure that federal resources remain in the communities they seek to serve," said USTelecom Senior Vice President of Government Affairs Brandon Heiner. "If Congress is serious about achieving universal connectivity, they should ensure that 100 percent of broadband grants go toward that goal.”
“This bipartisan effort encourages investments that reinforce and accelerate broadband deployment needed to close the digital divide in unserved and underserved communities. We must ensure that all grant funds can be optimally spent as intended to help build out equitable digital access that connects Americans across the country,” said CTIA Senior Vice President for Government Affairs Kelly Cole.
“The once-in-a-lifetime resources in the Infrastructure Investment and Jobs Act and the American Rescue Plan have provided our members with an amazing opportunity to build networks of the future,” said INCOMPAS CEO Chip Pickering. “While this investment will help spur competition and radically upgrade our broadband infrastructure, there are still too many barriers to deployment. Onerous taxes should not be one of them. I am pleased to see Senator Warner and Senator Moran reintroduce this vital piece of legislation and wholeheartedly support their efforts to get this signed into law and deliver on our promise to truly have Internet for All.”
“WTA applauds the historic federal investment in rural broadband, but the tax code needs to be amended so that the more than 370 small, locally-based broadband providers we represent don’t have to divert money received from grant funding to build broadband networks to paying taxes on that funding,” said Derrick B. Owens, Senior Vice President for Government and Industry Affairs for WTA - Advocates for Rural Broadband. “We support the bipartisan efforts of Senators Warner, Moran, and others to streamline the tax code so as much broadband funding goes toward building networks, and connecting all Americans to broadband, as quickly as possible. We hope to see the Broadband Grant Tax Treatment Act passed by Congress.”
“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. 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,” said NTCA Chief Executive Officer Shirley Bloomfield. “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 reintroducing the bill. This legislation will maximize the impact of every dollar granted for broadband deployment and further the mission of getting every American connected.”
“Congress has made tremendous investments in recent years to ensure universal access to broadband for all Americans with the passage of the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP). However, a significant percentage of the funds needed to accomplish this goal could be returned to the Treasury in the form of taxes, ultimately undermining the deployment of needed broadband infrastructure. This would significantly restrain efforts by America’s frontline providers in the digital divide – the small ISPs working in rural, under-resourced and Tribal areas of our country – who need every dollar they can obtain to ensure the goal of universal broadband connectivity is properly met,” said Eric Slee, VP of Government Affairs, WISPA – Broadband Without Boundaries. “WISPA commends Senators Warner and Moran for introducing the Broadband Grant Tax Treatment Act, a common sense and necessary solution, which would eliminate the tax on broadband grants. WISPA wholeheartedly supports their efforts in exempting IIJA and ARPA dollars from taxation and we are hopeful that similar treatment will eventually also apply to grants awarded through other federal programs. We know this will make federal broadband deployment programs more effective and ubiquitous.”