Federal

Broadband Grant Tax Treatment Act

Source: Congress.gov · 794 words in original text

What This Bill Does

This bill changes tax rules so that certain broadband grants do not count as income that people have to pay taxes on. The bill modifies the Internal Revenue Code to exclude specific broadband grants from what the government counts as "gross income" (the money a person or business earns that is subject to taxes).

Who It Affects

People and businesses that receive broadband grants from federal, state, territorial, tribal or local government programs. The Internal Revenue Service (the government agency that collects taxes).

Key Provisions

• Certain broadband grants no longer count as taxable income, meaning recipients do not have to pay federal income taxes on the money (Sec. 2(a)). • A person or business cannot claim a tax deduction (a reduction in taxable income) or a tax credit (a direct reduction in taxes owed) for the same broadband expense that was paid for with a grant money that is excluded from taxes (Sec. 2(a)). • The value of property purchased with excluded grant money must be reduced by that grant amount on tax records (Sec. 2(a)). • Qualifying grants include money from seven specific broadband programs established by federal law, including the Broadband Equity, Access, and Deployment Program and grants from state or local governments funded for broadband infrastructure (Sec. 2(a)).

What Changes

Recipients of certain broadband grants will no longer report those grants as taxable income on their federal tax returns. Property purchased with grant money will have a reduced value for tax purposes.

Important Definitions

"Qualified broadband grant" means grants or subgrants received under seven specific federal, state or local broadband programs listed in the bill for purposes of broadband deployment (providing internet service infrastructure).

Effective Date

Applies to amounts received in tax years ending after March 11, 2021.

II 118TH CONGRESS 1ST SESSION S. 341 To amend the Internal Revenue Code of 1986 to exclude certain broadband grants from gross income. IN THE SENATE OF THE UNITED STATES FEBRUARY 9, 2023 Mr. WARNER (for himself, Mr. MORAN, Mr. KAINE, Mr. WICKER, Mr. WARNOCK, Mr. CRAMER, Mr. MANCHIN, Mrs. CAPITO, Mr. KING, Mr. RISCH, Mr. KELLY, Mr. TUBERVILLE, Ms. SINEMA, Ms. MURKOWSKI, Mr. MENENDEZ, Mr. BENNET, and Ms. BALDWIN) introduced the fol- lowing bill; which was read twice and referred to the Committee on Fi- nance 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Broadband Grant Tax 4 Treatment Act’’. 5 VerDate Sep 11 2014 01:23 Feb 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S341.IS S341 kjohnson on DSK79L0C42PROD with BILLS 2 •S 341 IS SEC. 2. CERTAIN GRANTS FOR BROADBAND EXCLUDED 1 FROM GROSS INCOME. 2 (a) IN GENERAL.—Part III of subchapter B of chap- 3 ter 1 of the Internal Revenue Code of 1986 is amended 4 by inserting after section 139I the following new sub- 5 section: 6 ‘‘SEC. 139J. CERTAIN BROADBAND GRANTS. 7 ‘‘(a) IN GENERAL.—Gross income shall not include 8 any qualified broadband grant made for purposes of 9 broadband deployment. 10 ‘‘(b) DENIAL OF DOUBLE BENEFIT.—Notwith- 11 standing any other provision of this subtitle, no deduction 12 or credit shall be allowed for, or by reason of, any expendi- 13 ture to the extent of the amount excluded under sub- 14 section (a) for any qualified broadband grant which was 15 provided with respect to such expenditure. The adjusted 16 basis of any property shall be reduced by the amount ex- 17 cluded under subsection (a) which was provided with re- 18 spect to such property. 19 ‘‘(c) QUALIFIED BROADBAND GRANT.—For purposes 20 of this section, the term ‘qualified broadband grant’ 21 means— 22 ‘‘(1) any grant or subgrant received under the 23 Broadband Equity, Access, and Deployment Pro- 24 gram established under section 60102 of the Infra- 25 structure Investment and Jobs Act, 26 VerDate Sep 11 2014 01:23 Feb 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S341.IS S341 kjohnson on DSK79L0C42PROD with BILLS 3 •S 341 IS ‘‘(2) any grant or subgrant received under the 1 State Digital Equity Capacity Grant Program estab- 2 lished under section 60304 of such Act, 3 ‘‘(3) any grant received under the Digital Eq- 4 uity Competitive Grant Program established under 5 section 60305 of such Act, 6 ‘‘(4) any grant received under section 60401 of 7 such Act (relating to middle mile grants), 8 ‘‘(5) any grant received— 9 ‘‘(A) under the broadband loan and grant 10 pilot program established by section 779 of 11 Public Law 115–141 under the Rural Elec- 12 trification Act of 1936; and 13 ‘‘(B) from funds made available for such 14 program under the heading ‘Distance Learning, 15 Telemedicine, and Broadband Program’ under 16 the heading ‘Rural Utilities Service’ under title 17 I of division J of the Infrastructure Investment 18 and Jobs Act, 19 ‘‘(6) any grant received from a State, territory, 20 Tribal government, or unit of local government to 21 the extent such grant was— 22 ‘‘(A) funded by amounts provided to the 23 State or local government under section 602, 24 603, or 604 of the Social Security Act, and 25 VerDate Sep 11 2014 01:23 Feb 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S341.IS S341 kjohnson on DSK79L0C42PROD with BILLS 4 •S 341 IS ‘‘(B) provided for the stated purposes of 1 making investments in broadband infrastruc- 2 ture, or 3 ‘‘(7) any grant or subgrant received under sec- 4 tion 905 of division N of the Consolidated Appro- 5 priations Act, 2021. 6 ‘‘(d) REGULATIONS.—The Secretary shall issue such 7 regulations or other guidance as may be necessary or ap- 8 propriate to carry out the purposes of this section.’’. 9 (b) CLERICAL AMENDMENT.—The table of sections 10 for part III of subchapter B of chapter 1 of the Internal 11 Revenue Code of 1986 is amended by inserting after the 12 item related to section 139I the following new item: 13 ‘‘Sec. 139J. Certain broadband grants.’’. (c) EFFECTIVE DATE.—The amendments made by 14 this section shall apply to amounts received in taxable 15 years ending after March 11, 2021. 16 Æ VerDate Sep 11 2014 01:23 Feb 23, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S341.IS S341 kjohnson on DSK79L0C42PROD with BILLS

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