Feb 09 2023
WASHINGTON – Today, U.S. Sens. Mark Warner (D-VA) and Jerry Moran (R-KS) along with U.S. Reps. Mike Kelly (R-PA-16) and Jimmy Panetta (D-CA-19) reintroduced the Broadband Grant Tax Treatment Act (BGTTA) — legislation that would amend the Internal Revenue Code to ensure that funding for broadband deployment from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) will not be considered taxable income. This legislation was first introduced last Congress in both the Senate and the House of Representatives with bipartisan support.
Grants awarded for the purposes of broadband deployment are currently factored into a company’s income and are subject to taxation. This bipartisan, bicameral legislation moves to exclude broadband deployment grants awarded through the IIJA, ARP, and Tribal Broadband Connectivity Fund 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.
“We have made significant strides to ensure that access to high-speed internet is available to more Americans than ever,” said Sen. Warner, a member of the Finance Committee that oversees the nation’s tax code and a primary author of the broadband provisions in the IIJA and ARP. “But taxing broadband investment awards diminishes our efforts. This legislation ensures that individuals and businesses are able to reap the benefits of every dollar set aside for broadband expansion and deployment so that we can accomplish our goal of bringing reliable broadband to every corner of Virginia.”
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth or pursue an education,” said Sen. Moran. “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.”
“More than 800,000 Pennsylvanians, including 520,000 rural Pennsylvanians, lack quality broadband internet access,” said Rep. Kelly, Chairman of the Ways & Means Committee’s Subcommittee on Tax. “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. This legislation allows for existing grant funding to be spent as effectively as possible to help all American families from farm communities in California to the shores of the Great Lakes in Pennsylvania.”
“Although we were able to pass legislation last Congress providing major investments in our nation’s broadband, many small businesses who get that federal funding, to construct networks and connect our homes, may face steep taxes,” said Rep. Panetta. “The Broadband Grant Tax Treatment Act would exempt those grants from federal taxation and ensure that the funding is allocated for universal broadband. We will continue to work across the aisle in the House and across the U.S. Capitol with Senators to close the digital divide with investment and incentives that will bolster connectivity for every American.”
Joining Sens. Warner and Moran as co-sponsors are Sens. Tim Kaine (D-VA), Roger Wicker (R-MS), Rev. Raphael Warnock (D-GA), Kevin Cramer (R-ND), Joe Manchin (D-WV), Shelley Moore Capito (R-WV), Angus King (I-ME), James Risch (R-ID), Mark Kelly (D-AZ), Tommy Tuberville (R-AL), Kyrsten Sinema (I-AZ), Lisa Murkowski (R-AK), Bob Menendez (D-NJ), Michael Bennet (D-CO), and Tammy Baldwin (D-WI). Original co-sponsors in the House of Representatives are U.S. Reps. Terri Sewell (D-AL-07), Drew Ferguson (R-GA-03), Buddy Carter (R-GA-01), and Dan Kildee (D-MI-08).
“Access to high-speed internet is essential for telehealth, remote work, virtual learning, and more. The Bipartisan Infrastructure Law and American Rescue Plan made important investments to expand high-speed internet to more households in Virginia and across the country,” said Sen. Kaine. “Protecting these investments from being taxed will help ensure Virginians are getting the most out of these federal dollars.”
“The federal government should be lowering barriers to high speed internet access, not raising them,” said Sen. Wicker. “Taxing grants for broadband expansion only reduces their impact and penalizes providers who are working to close the digital divide.”
“High-speed broadband in North Dakota increases access to telehealth services, enhances learning pathways for students, and expands e-commerce opportunities for local businesses,” said Sen. Cramer. “We secured robust rural broadband grant funding in the infrastructure law, and this bill will help us maximize every dollar allocated.”
“Access to affordable, reliable broadband is vital to the success and growth of our communities across West Virginia,” said Sen. Manchin. “That’s why I helped author both the $65 billion broadband provisions in the Bipartisan Infrastructure Law and the $48 billion broadband provisions in the American Rescue Plan to provide historic funding to expand Internet access for all West Virginians, regardless of where they live across our great state. I’m proud to cosponsor this bipartisan, bicameral legislation to ensure the full amount of these critical grants are invested in expanding broadband access and I will continue fighting to promote the full participation of all West Virginians in today’s digital economy.”
“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,” said Sen. Capito. “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 reintroduce this legislation, and will continue to work toward solutions that help us close the digital divide in West Virginia and rural America.”
“Rural communities are the backbone of our nation, and we want to ensure that Americans living in these communities have access to high-speed internet,” said Sen. Tuberville. “Taxing broadband grants would undermine federal efforts to prioritize rural broadband expansion. I am proud to support this legislation so that those living in rural America have internet needed to run their businesses, access healthcare, and pursue educational opportunities.”
“Access to the internet is not a luxury, it is a fundamental necessity. However, too many families remain on the wrong side of the digital divide. Students, workers, families, innovators, and businesses of all sizes depend on reliable, affordable broadband more than ever, and that’s why we made historic investments in broadband deployment and digital equity during the last Congress,” said Sen. Menendez. “This commonsense bipartisan legislation will maximize the impact and success of these investments by ensuring these dollars support expanding access to broadband.”
“Coloradans rely on affordable, high-speed internet to stay in touch with family, discuss health concerns with their doctors, and enjoy the economic opportunities presented by the digital era,” said Sen. Bennet. “This bipartisan legislation will update our tax code to ensure that grants to connect our communities—including a program based off my BRIDGE Act that makes the single largest broadband investment in American history—are spent bridging the digital divide and building infrastructure for the 21st century.”
“As the COVID-19 has shown, access to reliable high-speed internet remains critical to the success of our communities,” said Rep. Sewell. “I am proud to support this rational bill ensuring that such resources can be utilized to the fullest extent without the tax code hindering growth in my district and across the state.”
“Broadband is essential 21st century infrastructure and every community – regardless of zip code – should have access to this critical tool and the growing opportunities it provides,” said Rep. Ferguson. “These federal grant funds must strictly be used for the intended purpose of building out broadband in rural and underserved communities, and not redirected back to the federal government. This important legislative fix ensures every federal dollar allocated is maximized and goes towards closing the digital divide.”
“The internet is no longer optional. From remote work to online learning, bill payments and more, we must ensure that federal dollars intended to help Georgians improve their digital access, particularly in rural areas, is not clawed back by the IRS,” said Rep. Carter.
“Reliable and affordable internet access is essential for Michiganders in today’s economy,” said Rep. Kildee. “The last Congress passed a new law, the Bipartisan Infrastructure Law, to expand high-speed broadband to every Michigan household. Our new bipartisan legislation would exempt broadband infrastructure grants from federal taxation for local governments and small businesses, to ensure we are maximizing this investment.”
As Senator, and during his tenure as the 69th Governor of Virginia, Sen. Warner has been a staunch advocate for expanded access to broadband. With more Virginia families relying on the internet for telework and telehealth following the COVID-19 crisis, Sen. Warner secured $65 billion in funding within the bipartisan infrastructure law to help deploy broadband, increase access, and decrease costs associated with connecting to the internet. Sen. Warner was also a key supporter of the American Rescue Plan, which delivered $17 billion in funding for broadband expansion across the country, including a $10 billion Capital Projects Fund that Sen. Warner authored and secured in the bill specifically for infrastructure projects to help rural and low- and moderate-income communities gain access to high-quality internet.
“CCA supports the Broadband Grant Tax Treatment Act, and I thank Senators Warner and Moran for reintroducing the legislation. Grant funding should be free from taxation to ensure all broadband grants awarded can be used to reach Americans with connectivity needs. Many rural and underserved communities will see great benefit from enhanced wireless broadband services, and every dollar granted should be used for that purpose,” said Competitive Carriers Association President & CEO Tim Donovan.
“We applaud Senators Warner and Moran's ongoing efforts to repeal the tax on broadband grants,” said USTelecom Senior Vice President of Government Affairs Brandon Heiner. “To achieve universal connectivity, Congress must eliminate this unnecessary tax to ensure that federal resources remain in the communities they seek to serve. If Congress is serious about achieving universal connectivity, they should ensure that 100 percent of broadband grants go toward that goal.”
“CTIA commends Senators Warner and Moran for reintroducing the Broadband Grant Tax Treatment Act. This bipartisan effort encourages investments that reinforce and accelerate broadband deployment needed to close the digital divide in unserved and underserved communities. We must ensure that all grant funds can be optimally spent as intended to help build out equitable digital access that connects Americans across the country,” said CTIA Senior Vice President for Government Affairs Kelly Cole.
“The once-in-a-lifetime resources in the Infrastructure Investment and Jobs Act and the American Rescue Plan have provided our members with an amazing opportunity to build networks of the future,” said INCOMPAS CEO Chip Pickering. “While this investment will help spur competition and radically upgrade our broadband infrastructure, there are still too many barriers to deployment. Onerous taxes should not be one of them. I am pleased to see Senator Warner and Senator Moran reintroduce this vital piece of legislation and wholeheartedly support their efforts to get this signed into law and deliver on our promise to truly have Internet for All.”
“WTA applauds the historic federal investment in rural broadband, but the tax code needs to be amended so that the more than 370 small, locally-based broadband providers we represent don’t have to divert money received from grant funding to build broadband networks to paying taxes on that funding,” said Derrick B. Owens, Senior Vice President for Government and Industry Affairs for WTA - Advocates for Rural Broadband. “We support the bipartisan efforts of Senators Warner, Moran, and others to streamline the tax code so as much broadband funding goes toward building networks, and connecting all Americans to broadband, as quickly as possible. We hope to see the Broadband Grant Tax Treatment Act passed by Congress.”
“We are grateful that Congress committed tens of billions of dollars to broadband deployment grants through recent bills seeking to help close the digital divide in our country. But taxing broadband grants – requiring recipients to pay back to the government a portion of what they receive from the government – will dramatically reduce the impact of these programs and likely leave the hardest-to-reach communities without essential connectivity for even longer,” said NTCA Chief Executive Officer Shirley Bloomfield. “It is critical that all broadband grant funds go toward their intended purpose of network deployment. NTCA is proud to support the Broadband Grant Tax Treatment Act, and on behalf of our members, I want to thank Senators Warner and Moran for reintroducing the bill. This legislation will maximize the impact of every dollar granted for broadband deployment and further the mission of getting every American connected.”
“Congress has made tremendous investments in recent years to ensure universal access to broadband for all Americans with the passage of the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP). However, a significant percentage of the funds needed to accomplish this goal could be returned to the Treasury in the form of taxes, ultimately undermining the deployment of needed broadband infrastructure. This would significantly restrain efforts by America’s frontline providers in the digital divide – the small ISPs working in rural, under-resourced and Tribal areas of our country – who need every dollar they can obtain to ensure the goal of universal broadband connectivity is properly met,” said Eric Slee, VP of Government Affairs, WISPA – Broadband Without Boundaries. “WISPA commends Senators Warner and Moran for introducing the Broadband Grant Tax Treatment Act, a common sense and necessary solution, which would eliminate the tax on broadband grants. WISPA wholeheartedly supports their efforts in exempting IIJA and ARPA dollars from taxation and we are hopeful that similar treatment will eventually also apply to grants awarded through other federal programs. We know this will make federal broadband deployment programs more effective and ubiquitous.”
"The Broadband Grant Tax Treatment Act is a common sense, bipartisan solution and a swift passage will ensure that the BEAD Program funding Congress appropriated via the Infrastructure Investment and Jobs Act will be used for its intended purpose," said Melissa Newman, vice president of government affairs at TIA. "Bridging the digital divide and delivering reliable, high-speed broadband is what the BEAD Program is designed to do, and taxing the grant funds would be counterproductive to the objective of this investment in America's infrastructure."
“I appreciate Senators Warner and Kaine introducing legislation to prevent the taxation of broadband grants,” said Bill Franklin, CEO, Scott County Telephone Cooperative. “One of the requirements for these grants is financial sustainability. This tax burden would make many rural unserved and underserved areas ineligible due to their inability to meet the financial sustainability requirement. I appreciate Senator Warner’s business knowledge and experience to recognize that fact. This legislation will ensure many rural Virginians and rural households across the US get access to reliable and robust broadband!”
Full text of legislation is available here.