Legislation to Prevent Taxation of Broadband Grants
WASHINGTON, D.C. – Today, U.S. Senator Shelley Moore Capito (R-W.Va.) joined U.S. Senators Mark Warner (D-Va.), Jerry Moran (R-Kan.), Tim Kaine (D-Va.), Roger Wicker (R-Miss.), and Raphael Warnock (D-Ga.), to introduce the Broadband Grant Tax Treatment Act (BGTTA). The legislation would amend the Internal Revenue Code to ensure that funding directed for the implementation of broadband from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) 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 subjected to additional taxes due to scheduled changes to the corporate tax code that kick in beginning next year unless Congress acts now to address the problem. 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.
“When Congress funded grant programs to help deploy broadband in underserved states like West Virginia, it was intended for all of those funds to be used for exactly that purpose – for broadband deployment,” Senator Capito said. “Taxing federal broadband grants as gross income undermines our intent for these programs and would further delay efforts to close the digital divide in areas that need broadband connectivity the most. I’m proud to join my colleagues to introduce this legislation, and I will continue working toward our shared goal of helping bridge the digital divide in West Virginia and rural America.”