Federal grants awarded for broadband deployment would not be considered taxable income under a bipartisan bill unveiled by U.S. Sens. Jerry Moran (R-KS) and Shelley Moore Capito (R-WV).
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth, or pursue an education,” Sen. Moran said on Monday. “This common-sense 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.”
Sen. Moran on Feb. 20 sponsored the Broadband Grant Tax Treatment Act, S. 674, alongside 11 original cosponsors, including Sen. Capito and U.S. Sens. Roger Wicker (R-MS), Deb Fischer (R-NE), and Mark Warner (D-VA).
“Taxing federal broadband grants as gross income undermines the intent for broadband deployment programs,” said Sen. Capito. “The Broadband Grant Tax Treatment Act would help make sure this doesn’t happen so we can continue our efforts to close the digital divide in the areas that need broadband connectivity the most.”
Currently, grants awarded to broadband providers for the purposes of broadband deployment are factored into a company’s income and taxed as income, according to a bill summary provided by Sen. Moran’s staff.
If enacted, S. 674 would amend the Internal Revenue Code of 1986 to exclude certain broadband grants from gross income to ensure the entirety of federal dollars awarded to companies to deploy broadband are used for that purpose, the summary says.
“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,” Sen. Warner said. “Taxing these broadband investment awards is counter-productive and will ultimately diminish efforts to give more Americans access to high-speed internet.”
The measure has been referred for consideration to the U.S. Senate Finance Committee.