Broadband Grant Tax Treatment Act

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Last month NTCA and several other organizations sent correspondence to members of the U.S. Senate and the U.S. House of Representatives who hold positions on the Congressional Finance and Ways and Means Committees. The purpose of the correspondence was to urge the committees to include the bipartisan and bicameral Broadband Grant Tax Treatment Act (BGTTA) as part of any broader tax legislation that Congress may consider. The BGTTA was first introduced in Congress in 2022 and then reintroduced in February of 2023.

This legislation would ensure that funding from the Infrastructure Investment and Jobs Act (IIJA), the American Rescue Plan (ARP), the Tribal Connectivity Fund, and other federal grant funding will not be considered taxable income. The Bill’s sponsors submit that grants awarded for broadband deployment should not be factored into a company’s taxable income thereby ensuring that all federal grant dollars awarded for the purpose of deploying broadband can be used for that purpose rather than a portion of the funding being returned to the government in taxes.

NTCA’s letter echoes the opinions of the sponsors of the legislation. NTCA points out that through the BEAD program, the Middle Mile program, and the Tribal Connectivity Fund, Congress has provided historic levels of investment with the goal of achieving universal broadband connectivity for all Americans, however, without the changes to the tax code called for by this legislation a significant portion of the funding will return to the government in the form of taxes.  This result, NTCA opines, is contrary to Congress’ intent when approving the IIJA and ARP.

To date the BGTTA has not been acted on in the House or Senate. NTCA urges Congress to adopt the BGTTA so as to ensure that several additional billions of dollars of broadband funding will be used for that purpose instead of being returned to the government in the form of taxes.

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