Bill Summary
The "Broadband Grant Tax Treatment Act" is legislation aimed at amending the Internal Revenue Code to exclude specific broadband-related grants from being counted as gross income for tax purposes. This means that individuals or entities receiving these qualified broadband grants will not have to include these funds in their taxable income, providing a financial incentive for broadband deployment.
Key provisions of the act include:
1. **Exclusion from Gross Income**: Qualified broadband grants received for broadband deployment will not be included in recipients' gross income.
2. **Denial of Double Benefit**: Recipients cannot claim additional tax deductions or credits for expenses covered by these excluded grants, ensuring that the tax benefit applies only to the funding received and not to the expenses incurred in connection with it.
3. **Definition of Qualified Broadband Grants**: The act specifies various types of grants that qualify for this exclusion, including those from federal programs aimed at broadband equity and deployment, state grants funded by federal allocations, and specific grants related to rural broadband initiatives.
4. **Regulatory Authority**: The Secretary of the Treasury is tasked with issuing necessary regulations to implement this provision.
5. **Effective Date**: The changes apply to amounts received in taxable years ending after March 11, 2023.
Overall, the legislation is intended to encourage investment in broadband infrastructure by reducing the tax burden associated with receiving government grants for such projects.
Possible Impacts
The "Broadband Grant Tax Treatment Act" has several potential effects on individuals and entities that receive broadband grants. Here are three examples:
1. **Increased Access to Broadband Services**:
By excluding certain broadband grants from gross income, this legislation could encourage more individuals and businesses to apply for grants aimed at improving broadband infrastructure. As a result, underserved areas may see an increase in broadband access, allowing residents to benefit from better internet connectivity for work, education, and telehealth services.
2. **Financial Relief for Recipients**:
The exclusion of qualified broadband grants from gross income can provide significant financial relief to recipients, such as local governments and non-profit organizations. By not having to report these grants as income, recipients can allocate more funds toward expanding and enhancing broadband services, rather than setting aside a portion for tax liabilities. This can promote more robust investment in broadband infrastructure projects.
3. **Impact on Tax Deductions**:
The provision that denies double benefits means that recipients cannot claim deductions or credits for expenses covered by the excluded broadband grants. While this prevents the potential for taxpayers to receive a double benefit, it can also affect how organizations plan their budgets and financial strategies. Entities may need to carefully consider how to structure their funding and expenditures to maximize the benefits of the grants received while complying with the tax regulations.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1873 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1873
To amend the Internal Revenue Code of 1986 to exclude certain broadband
grants from gross income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 5, 2025
Mr. Kelly of Pennsylvania (for himself and Mr. Panetta) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exclude certain broadband
grants from gross income.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Broadband Grant Tax Treatment Act''.
SEC. 2. CERTAIN GRANTS FOR BROADBAND EXCLUDED FROM GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
139I the following new subsection:
``SEC. 139J. CERTAIN BROADBAND GRANTS.
``(a) In General.--Gross income shall not include any qualified
broadband grant made for purposes of broadband deployment.
``(b) Denial of Double Benefit.--Notwithstanding any other
provision of this subtitle, no deduction or credit shall be allowed
for, or by reason of, any expenditure to the extent of the amount
excluded under subsection (a) for any qualified broadband grant which
was provided with respect to such expenditure. The adjusted basis of
any property shall be reduced by the amount excluded under subsection
(a) which was provided with respect to such property.
``(c) Qualified Broadband Grant.--For purposes of this section, the
term `qualified broadband grant' means--
``(1) any grant or subgrant received under the Broadband
Equity, Access, and Deployment Program established under
section 60102 of the Infrastructure Investment and Jobs Act,
``(2) any grant or subgrant received under the State
Digital Equity Capacity Grant Program established under section
60304 of such Act,
``(3) any grant received under the Digital Equity
Competitive Grant Program established under section 60305 of
such Act,
``(4) any grant received under section 60401 of such Act
(relating to middle mile grants),
``(5) any grant received--
``(A) under the broadband loan and grant pilot
program established by section 779 of Public Law 115-
141 under the Rural Electrification Act of 1936; and
``(B) from funds made available for such program
under the heading `Distance Learning, Telemedicine, and
Broadband Program' under the heading `Rural Utilities
Service' under title I of division J of the
Infrastructure Investment and Jobs Act,
``(6) any grant received from a State, territory, Tribal
government, or unit of local government to the extent such
grant was--
``(A) funded by amounts provided to the State or
local government under section 602, 603, or 604 of the
Social Security Act, and
``(B) provided for the stated purposes of making
investments in broadband infrastructure, or
``(7) any grant or subgrant received under section 905 of
division N of the Consolidated Appropriations Act, 2021.
``(d) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item related to section 139I the
following new item:
``Sec. 139J. Certain broadband grants.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received in taxable years ending after March 11, 2023.
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