Official Summaries

Broadband Grant Tax Treatment Act

This bill excludes from gross income (for federal tax purposes) certain grants received for broadband deployment.

As background, contributions of capital to a corporation generally are not taxable income. However, under an exception enacted in 2017 by the Tax Cuts and Jobs Act, grants from a government or civic organization are not contributions to capital and, thus, treated as taxable income. Prior to the Tax Cuts and Jobs Act, the Internal Revenue Service (IRS) considered certain grants from a government or civic organization contributions of capital and, thus, not taxable income.

The bill specifically excludes from gross income grants received for broadband deployment from the

• National Telecommunications and Information Administration (NTIA) Broadband Equity, Access, and Deployment Program;
• NTIA State Digital Equity Capacity Grant Program;
• NTIA Digital Equity Competitive Grant Program;
• NTIA Enabling Middle Mile Broadband Infrastructure Program;
• Department of Agriculture ReConnect Program;
• Coronavirus State and Local Fiscal Recovery Funds and the Coronavirus Capital Projects Fund; and
• NTIA Tribal Broadband Connectivity Program and the Broadband Infrastructure Program.

The bill also requires the IRS to issue guidance on the exclusion from gross income of such grants.

The bill applies to funds received in tax years ending after March 11, 2021.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 674 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                 S. 674

To amend the Internal Revenue Code of 1986 to exclude certain broadband 
                       grants from gross income.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 20, 2025

   Mr. Moran (for himself, Mr. Warner, Mr. Sullivan, Mr. Kaine, Mr. 
Tuberville, Mr. Kelly, Mrs. Capito, Mr. King, Mr. Wicker, Mr. Warnock, 
Mr. Cramer, and Mrs. Fischer) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 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, 2021.
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