Analyst: BEAD Federal Tax Exemption Bill Would Not Apply to States

WASHINGTON, Mar. 3, 2025 – A bipartisan Senate bill aimed at exempting Broadband Equity, Access and Deployment program grants from federal taxation would not prevent states from imposing their taxes on these funds, according to Casey Lide, a partner at Keller & Heckman.

In a Saturday email, Lide said, “the bill would not bar states from taxing BEAD or other broadband grants. However, state income tax is a much smaller issue compared to federal income tax.”

The bill under consideration is the Broadband Grant Tax Treatment Act, introduced on February 24 by Sens. Mark Warner, D-Virginia, and Jerry Moran, R-Kansas. The bill would remove federal taxation from BEAD and American Rescue Plan funding, ensuring that BEAD funding doesn’t get recycled back into the federal government.