U.S. Sen. Jerry Moran (R-KS) has proposed bipartisan legislation that would exclude federal broadband deployment grant dollars from being considered taxable income to ensure all awarded monies are used wholly to deploy broadband, rather than making their way back to the government through taxes.
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth or pursue an education,” Sen. Moran said. “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.”
On Sept. 29, Sen. Moran signed on as the lead original cosponsor of S. 5021, which is sponsored by U.S. Sen. Mark Warner (D-VA) and four other original cosponsors, including U.S. Sens. Roger Wicker (R-MS) and Shelley Moore Capito (R-WV).
Currently, federal grants awarded to industry for broadband deployment are factored into a company’s income and soon will be subject to additional taxes due to scheduled changes to the corporate tax code that start next year, according to information provided by Sen. Moran’s office.
If enacted, S. 5021 would amend the Internal Revenue Code of 1986 to exclude certain broadband grants from gross income, according to the congressional record, specifically grants awarded through the American Rescue Plan Act (ARP) and the Infrastructure Investment and Jobs Act (IIJA).
Sen. Warner said that to fully reap the benefits of the ARP and the IIJA, every dollar that was set aside to fund broadband expansion and deployment should be used for that purpose. “Taxing these broadband investment awards would be counter-productive, and could ultimately diminish efforts to give more Americans access to high-speed internet,” he said.
The bill, which is supported by NTCA and the WTA – Advocates for Rural Broadband, has been referred for consideration to the U.S. Senate Finance Committee.