Senators Push Bill to Make Broadband Grants Non-Taxable By Year-End

WASHINGTON, November 16, 2022 – Sen. Mark Warner, D-Va., said Wednesday that he is pushing to become law this year a bill that would shield from taxes federal broadband funds to maximize the amounts going to builds.

“I’m engaged real-time in conversations with the finance committee and others to see if we could get this included (in) the end-of-the-year package,” he explained at the 2022 US Telecom Broadband Investment Forum.

Warner and Senator Jerry Moran, R-Kan., on Wednesday touted the Broadband Grant Tax Treatment Act, which was introduced by the senators in September. Each emphasized the importance of maximizing the reach of federal broadband funding.

Tax-exempt funding programs would include middle-mile grants, the Digital Equity Competitive Grant Program, and the Broadband Equity, Access, and Deployment program. The BEAD program will distribute $42.45 billion – about two thirds of the IIJA’s broadband funds – to the states.

“One way (to get broadband funds to unserved areas) is to make sure that the money is not returned to the Treasury because of a tax on the grants,” argued Moran. “Taxing the grants would limit the effectiveness of the deployment programs. This would mean fewer people would receive broadband services in our state and around the country, and it would reduce the chances that rural America finally gets the service that it needs.

“Forcing broadband providers to pay back a portion of their broadband-deployment funds just lacks common sense,” he added.

To prevent federally-funded overbuilding – in which money goes to areas that already have adequate infrastructure – Moran advocated robust congressional oversight. Congress should use its power of the purse to promote executive agency accountability, he argued.

Moran also called for close coordination between the FCC, the National Telecommunications and Information Administration, and the Rural Utilities Service, three leading administers of federal broadband funding.

In August, US Telecom and fellow trade organization NCTA – The Internet & Television Association argued for federal protections against overbuilding in comments submitted to the Federal Communications Commission.