Kelly introduces bipartisan bill ensuring broadband investments are not taxable income

U.S. Rep. Mike Kelly (R-PA) on Dec. 7 introduced the bipartisan Broadband Grant Tax Treatment Act, H.R. 9449, which seeks to exempt broadband grants from taxation.

Specifically, the legislation would amend the Internal Revenue Code to ensure that funding allocated to companies for broadband deployment under the Infrastructure and Investment Jobs Act and the American Rescue Plan is not considered taxable income.

Currently, broadband deployment grants are factored into a company’s income and due to coming changes to the corporate tax code next year, will soon be subjected to additional taxes.

Rep. Kelly said the bill allows for existing grant funding to be spent as effectively as possible.

“More than 800,000 Pennsylvanians, including 520,000 rural Pennsylvanians, lack quality broadband internet access,” Rep. Kelly said. “This bill will not only help to change to that, but it will also work to make that 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.”

H.R. 9449 was introduced by U.S. Rep. Jimmy Panetta (D-CA) with Rep. Kelly as the lead original cosponsor.

Bill supporters, which include WTA – Advocates for Rural Broadband, NTCA – The Rural Broadband Association, CTIA, and USTelecom, applaud the measure for identifying the importance of broadband implementation across the country and seeking to maximize the impact of every dollar awarded for broadband deployment.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” USTelecom President and CEO Jonathan Spalter said. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose. The dream of a truly connected nation is within reach, failure is not an option.  America’s broadband providers are all in and are doing our part. For its part, Congress must act to eliminate the tax, and this bill is the right place to start.”

Companion legislation, S. 5021, was introduced in the Senate in September by U.S. Sens. Jerry Moran (R-KS) and Mark Warner (D-VA), with original cosponsors U.S. Sens. Roger Wicker (R-MS) and Shelley Moore-Capito (R-WV).