Broadband Grant Tax Treatment Act
Broadband Grant Tax Treatment Act
Plain Language Summary
# Broadband Grant Tax Treatment Act Summary **What the Bill Does:** This bill would allow companies and organizations that receive federal broadband infrastructure grants to exclude those grants from their taxable income. Currently, grants for broadband deployment are treated as taxable income under tax rules established in 2017. The bill would change this so that grants from specific federal broadband programs—including those administered by the National Telecommunications and Information Administration (NTIA)—would not be counted as income for tax purposes, potentially reducing the tax burden on grant recipients. **Who It Affects and Current Status:** The bill primarily affects companies and organizations receiving federal grants to build or expand broadband networks, particularly in underserved areas.
It's sponsored by Senator Jerry Moran (R-KS) and is currently in committee, meaning it hasn't yet been voted on by the full Senate. The bill essentially restores tax treatment that existed before 2017, when the government considered these grants as capital contributions rather than taxable income.
CRS Official Summary
Broadband Grant Tax Treatment ActThis bill excludes from gross income (for federal tax purposes) certain grants received for broadband deployment.As background, contributions of capital to a corporation generally are not taxable income. However, under an exception enacted in 2017 by the Tax Cuts and Jobs Act, grants from a government or civic organization are not contributions to capital and, thus, treated as taxable income. Prior to the Tax Cuts and Jobs Act, the Internal Revenue Service (IRS) considered certain grants from a government or civic organization contributions of capital and, thus, not taxable income.The bill specifically excludes from gross income grants received for broadband deployment from theNational Telecommunications and Information Administration (NTIA) Broadband Equity, Access, and Deployment Program;NTIA State Digital Equity Capacity Grant Program;NTIA Digital Equity Competitive Grant Program;NTIA Enabling Middle Mile Broadband Infrastructure Program;Department of Agriculture ReConnect Program;Coronavirus State and Local Fiscal Recovery Funds and the Coronavirus Capital Projects Fund; andNTIA Tribal Broadband Connectivity Program and the Broadband Infrastructure Program.The bill also requires the IRS to issue guidance on the exclusion from gross income of such grants.The bill applies to funds received in tax years ending after March 11, 2021.
Latest Action
Read twice and referred to the Committee on Finance.