Senators from both parties are protesting new corporate taxes on desperately needed federal funds.
Key Details
- On Thursday Senator Mark Warner (D-VA) and Senator Jerry Moran (R-KS) introduced the bi-partisan “Broadband Grant Tax Treatment Act.”
- If enacted, the bill will amend IRS codes to protect allocated federal funding for broadband Internet access development from new taxes.
- “Grants awarded to industry for the purposes of broadband deployment are currently factored into a company’s income and will soon be subjected to additional taxes due to scheduled changes to the corporate tax code that kick in beginning next year,” says Sen. Warner.
- “This new bipartisan legislation moves to exclude broadband deployment grants … from an organization’s income, 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,” Sen. Warner continues.
- The Infrastructure Investment and Jobs Act and the American Rescue Plan allocated funds to broadband development.
Why it’s news
Lawmakers from both parties have warned that the current tax code could negatively impact funding for broadband development in rural areas.
“The senators are concerned that tax policy scheduled to take effect in 2023 will essentially water down the broadband investments that Biden and many lawmakers have called critical,” says Axios.
Many parts of the United States have underdeveloped access to the internet, which impacts daily life and limits access to remote work, telehealth, education, communication, and emergency services.
“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth, or pursue an education. This common-sense legislation would make certain federal grants provided for broadband deployment are not counted as taxable income to maximize the impact and success of these resources,” says Sen. Moran.
Notable quote
“The federal government is making an enormous investment in rural broadband, but the effects of the tax code make it harder for the small, locally-based broadband providers we represent to maximize the amount of funding going to build out the network. We applaud the Senators for introducing this bipartisan legislation, which would streamline the tax code so that we’ll get as much broadband built as quickly as possible,” says WTA Advocates for Rural Broadband SVP Derrick B. Owens.
