Broadband Industry Groups Push for Tax-Exempt Grants

Seven trade groups urged lawmakers to pass the Broadband Grant Tax Treatment Act.

Broadband Industry Groups Push for Tax-Exempt Grants
Photo from Pictures of Money

WASHINGTON, January 29, 2024 – Broadband industry groups pushed lawmakers on Thursday to include in any upcoming tax package a bill that would mark federal broadband grants as non-taxable.

Seven groups, including INCOMPAS, WISPA, and NTCA, wrote to Senate Finance Committee and House Ways and Means Committee leaders.

They specifically express support for the Broadband Grant Tax Treatment Act, which would remove federal broadband grant money from the “gross income” figure used by the IRS to calculate taxes.

The bill, reintroduced in February 2023, would make tax free the $42.5 billion set to flow in coming years from the Infrastructure Act’s BEAD program.

With that program and others, “Congress has provided historic investment with the goal of achieving universal connectivity for all Americans,” the letter says. “Without this change in the tax code, a significant portion of funding intended for deploying broadband to unserved and underserved communities will revert to the government in the form of taxes.”

A broader 2024 tax package cleared the House Ways and Means Committee on Friday, which included other measures broadband groups have been interested in: the immediate expensing of research and development costs and the extension of a rule allowing companies to immediately expense equipment costs. The package would implement both through 2025.

Companies have been required to write off domestic R&D costs over five years since 2022 after Trump-era tax changes went into effect. The Telecom Industry Association said in a January 18 letter to House and Senate leaders that this makes it “more expensive for businesses to invest in the next generation of technologies” like 6G and open RAN.

NTCA CEO Shirley Bloomfield penned a separate letter on January 24 expressing support for extending the “100% bonus depreciation” measure, which allows the immediate expensing of eligible assets.

The extension would “help many small rural broadband providers justify and recover the costs of network investment in the most sparsely populated areas of the United States,” she wrote.

Bloomfield also said in the letter that the Broadband Grant Tax Treatment Act “should likewise be seen as a critical component of any comprehensive tax legislation” and urged the Senate Finance Committee to push it forward.