Lawmakers introduce legislation to prevent taxation of broadband grants

WASHINGTON, D.C. – Lawmakers are looking to amend the Internal Revenue Code to stop broadband deployment funds from being classified as taxable income.

According to a recent release from the office of West Virginia Senator Shelley Moore Capito, the driving force behind this effort is a bipartisan group, which includes Senators Shelley Moore Capito and Joe Manchin, looking to reintroduce the Broadband Grant Tax Treatment Act (BGTTA) to amend the Internal Revenue Code, which taxes broadband deployment funds from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP).

“Access to affordable, reliable broadband is vital to the success and growth of our communities across West Virginia,” Senator Manchin said.

“Grants awarded for the purposes of broadband deployment are currently factored into a company’s income and are subject to taxation,” the release said. The BGTTA will allow for the exclusion of broadband deployment grants awarded through the IIJA and ARP from an organization’s income, thus avoiding this tax.

“When Congress funded grant programs to help deploy broadband in underserved states like West Virginia, it was intended for all of those funds to be used for exactly that purpose – for broadband deployment,” Senator Capito said. “Taxing federal broadband grants as gross income undermines our intent for these programs and would further delay efforts to close the digital divide in areas that need broadband connectivity the most.”