Broadband Grant Tax Treatment Act

The Broadband Grant Tax Treatment Act (S.674) was introduced in the Senate on February 20, 2025, by Senator Moran (R-KS) with 15 cosponsors. It has been referred to the Senate Committee on Finance. The bill amends the Internal Revenue Code to exclude from gross income any qualified broadband grant made for purposes of broadband deployment, specifically covering grants from BEAD, Digital Equity, middle mile, and rural broadband programs authorized by the Infrastructure Investment and Jobs Act. A companion bill (HR1873) has been referred to the House Ways and Means Committee. The funding mechanism is a tax exclusion, not an appropriation. The bill does not authorize new spending—it increases the effective value of existing, already-appropriated IIJA broadband funds by removing the 21% corporate income tax liability on grant income. For every $100 of grant received, the recipient currently owes $21 in federal tax; this bill would eliminate that liability. The Congressional Budget Office would score this as a revenue loss, not a spending increase. The structural winners are telecommunications infrastructure companies that deploy broadband networks, particularly tower REITs (Crown Castle, American Tower, SBA Communications) and fiber providers. These companies either receive grants directly or have wireless carriers as tenants that benefit from grant-funded rural builds. The tax treatment change improves carrier return on investment for rural deployments, which should accelerate leasing activity on existing tower assets and justify new construction. Fiber and rural broadband operators such as Lumen Technologies, Windstream, and regional rural telcos would also benefit, but they are not publicly traded in pure-play form. Real market data shows the three tower REITs have diverged significantly over the past 30 days. Crown Castle is up 7.77% (current $85.87), American Tower is up 4.6% (current $178.19), and SBA Communications is up 27.17% ($215.97). Over the last 7 days, all three have declined slightly: CCI -1.89%, AMT -0.46%, SBAC -1.65%. These movements reflect broader market and interest rate sentiment rather than bill-specific activity—the legislation has no material market impact until it advances past committee. Legislative timeline: The bill has had only two actions—introduction and referral—both on the same day. It remains in the Senate Finance Committee with no scheduled markup. The companion bill (HR1873) is in House Ways and Means. Full passage requires committee markup, floor votes in both chambers, and presidential action. Tax legislation historically moves slowly; this bill is unlikely to become law in calendar year 2025. Investors should monitor committee schedules and cosponsor growth as leading indicators.