House Bill Exempts Broadband Subsidies From Taxes

Capitol Hill
(Image credit: Architect of the Capitol)

A bipartisan House bill has been introduced that would exempt billions of dollars in government broadband subsidy money from taxation.

The bill, the Broadband Grant Tax Treatment Act, was introduced Wednesday (Dec. 7) by Reps. Jimmy Panetta (D-Calif.) and Mike Kelly (R-Pa.) to plenty of applause from the broadband sector.

The House bill mirrors one already introduced in the Senate by Sens. Mark Warner (D-Va.) and Jerry Moran (R-Kan.).

Specifically, the bill amends the tax code to say that broadband buildout subsidies providers get in the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) are not taxable income.

"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," said Shirley Bloomfield, CEO of NTCA-the Rural Broadband Association. "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. It is critical that all broadband grant funds go toward their intended purpose of network deployment."

"Representative Panetta's and Kelly's bill to eliminate the counter-productive tax on broadband grants is right on the money," said USTelecom President Jonathan Spalter. "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." ■

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.