Bill Exempts Broadband Providers from Taxes on Infrastructure Billions

Capitol Building

A bipartisan group of powerful lawmakers has introduced a bill that would exclude internet providers from taxes on broadband infrastructure grant funding, of which there are tens of billions of dollars in subsidies across multiple programs.

The bipartisan Broadband Grant Tax Treatment Act was introduced by Sens. Mark Warner (D-Va.) and Jerry Moran (R-Kan.), with an assist from Sens. Tim Kaine (D-Va.), Roger Wicker (R-Miss.), Raphael Warnock (D-Ga.) and Shelley Moore Capito (R-W.Va.).

The bill would amend the Internal Revenue Code to say that funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan would not be considered taxable income to broadband providers.

“Grants awarded to industry for the purposes of broadband deployment are currently factored into a company’s income and will soon be subjected to additional taxes due to scheduled changes to the corporate tax code that kick in beginning next year — unless Congress acts now to address the problem,” the lawmakers said. Their bill would make sure that every funding dollar went to closing the digital divide and none to the tax collector. 

“Taxing these broadband investments awards would be counter-productive, and could ultimately diminish efforts to give more Americans access to high-speed internet,” Warner said.

“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,” Shirley Bloomfield, CEO of NTCA-The Rural Broadband Association, said. “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.” ▪️

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.