Reps. Kelly, Panetta introduce 'Broadband Grant Tax Treatment Act' to expand broadband internet access

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WASHINGTON, D.C. -- Today, U.S. Reps. Mike Kelly (R-PA), Chairman of the Ways & Means Committee's Subcommittee on Tax, and Jimmy Panetta (D-CA), reintroduced the Broadband Grant Tax Treatment Act (BGTTA) - legislation that would amend the Internal Revenue Code to ensure that funding for broadband deployment from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) will not be considered taxable income.

This legislation was previously introduced in 2021 and 2023 in both the House of Representatives and the Senate with bipartisan support.

"This bill will work to make broadband internet access more affordable. It also ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment. Internet connectivity brings together all Americans; it strengthens small businesses and E-Commerce; and it expands educational opportunities for our children," said Rep. Kelly. "This legislation allows for existing grant funding to be spent as effectively as possible to help all American families from farm communities in California to the shores of the Great Lakes in Pennsylvania."

"Right now, broadband providers receiving federal grants to expand internet access are being taxed on those funds, reducing the impact of our historic investment in connectivity," said Rep. Panetta. "The Broadband Grant Tax Treatment Act will exempt these grants from federal taxation, ensuring that every dollar goes toward closing the digital divide. I'm proud to work across the aisle and across the Capitol to advance this bipartisan, commonsense fix and bring reliable broadband to every American."

"NTCA and its members greatly appreciate Congress's commitment to funding broadband deployment programs that help further the mission of connecting all Americans," said Shirley Bloomfield, CEO of NTCA-The Rural Broadband Association. "However, when these funds are taxed, providers are required to pay the federal government a portion of the same award that they received from the federal government, instead of using the funds to serve the hardest-to-reach communities. NTCA thanks Reps. Kelly and Panetta for their leadership in introducing this commonsense legislation to ensure that every dollar granted for broadband deployment is used effectively for that very purpose."

"ACA Connects thanks Congressmen Kelly and Panetta and Senators Moran and Warner for leading on the Broadband Grant Tax Treatment Act," said Grant Spellmeyer, ACA Connects President and CEO. "This bipartisan legislation will ensure 100 percent of broadband grants are used to close the digital divide. America's small and independent providers support this bill to make every dollar count as they invest in their communities, deploy infrastructure, and connect more people to high-speed internet."

"INCOMPAS members are building networks of the future with a mission to connect all Americans. Public-private partnerships are a critical component to help achieve this goal," said Chip Pickering, CEO of INCOMPAS. "This bill will ensure every single dollar allocated to deploying broadband goes to deploying broadband. INCOMPAS wholeheartedly supports this commonsense measure and urges Congress to act swiftly to ensure our members can continue to use critical grant resources to bridge the digital divide."

"We applaud Representatives Kelly and Panetta for reintroducing this bipartisan legislation to make sure the small, rural broadband providers we represent don't get stuck with a major tax bill when they accept government grants to build broadband networks," said Derrick Owens, Senior Vice President for Government and Industry Affairs for WTA - Advocates for Rural Broadband. "Congress has made an historic level of investment in broadband over the past several years and we want to see it pay dividends. Every dollar diverted to paying taxes on government grants is a dollar that is not invested in the network and connecting all Americans to broadband."

"The Communications Infrastructure Contractors Association and our 1,000 member companies from coast to coast are proud to support the Broadband Grant Tax Treatment Act that was recently introduced in the 119th Congress," said Todd Schlekeway, President & CEO of NATE: The Communications Infrastructure Contractors Association. "NATE member companies are on the front lines of deployment and will play an instrumental role in closing the digital divide. It is imperative that the entirety of federal broadband dollars allocated for these purposes go towards connectivity, rather than making their way back to the government through taxes. We thank Senators Jerry Moran and Mark Warner for bringing this legislation forward in the Senate and also applaud Representatives Mike Kelly and Jimmy Panetta for spearheading this important proposal in the House of Representatives."

BACKGROUND

Grants awarded for the purposes of broadband deployment are currently factored into a company's income and are subject to taxation. This bipartisan, bicameral legislation moves to exclude broadband deployment grants, ensuring the entirety of federal dollars awarded to companies for the purpose of deploying broadband around the country can be used wholly for that purpose, rather than making their way back to the government through taxes.