Advocacy Issue
Small Business Challenges
NTCA members are small businesses largely based in the communities they serve. While they deploy and operate networks and provide services that equal or surpass those of the largest communications firms in the United States, they do so with only a small fraction of the staff that these larger firms employ.
Why It Matters
As small operators, NTCA members need the ability to focus on operating their networks and delivering services, rather than face excessive burdens in the form of ambiguous rules or overly complex regulatory frameworks. NTCA therefore advocates for “right-sized” regulation that takes meaningful account of the goals to be achieved through any rule and the relative burden of compliance for firms of all sizes.
Tax Issues
In 2017, the Tax Cuts and Jobs Act (“TCJA”) made federal grants taxable as income for the first time. Congress has since committed billions of dollars to broadband deployment through the American Rescue Plan Act (“ARPA”) and the Infrastructure Investment and Jobs Act (“IIJA”) to close the digital divide. But taxing broadband grants will dramatically reduce the impact of these programs and likely leave the hardest-to-reach communities without essential connectivity for even longer. It is critical that all government broadband grant funds go toward network deployment, rather than returning a significant portion of those funds back to the government in the form of subsequent tax payments on the grants.
In 2017, the TCJA increased the depreciation percentage from 50 to 100 percent, allowing businesses to immediately deduct the cost of capital investments in a single year. But bonus depreciation is scheduled to decrease to 80% in 2023, and then steadily decline until it expires at the end of 2026. Therefore, NTCA advocates to permanently extend bonus depreciation by allowing businesses to fully expense assets in the year acquired.
Sarbanes-Oxley Disclosure Requirements
The Sarbanes-Oxley Act of 2002 subjects small businesses to the reporting and disclosure requirements of the Securities Exchange Act of 1934 (the Exchange Act). The Exchange Act requires companies—other than certain kinds of banks—that have 500 or more shareholders and $10 million or more in total assets to register with the Securities and Exchange Commission.
For small rural broadband providers, the burdens of potential registration arising out of community ownership come atop already significant challenges in the form of telecommunications regulatory requirements and the cost-intensive business of deploying and operating advanced networks in high-cost rural areas to deliver essential broadband connectivity in the most sparsely populated areas of the country. NTCA advocates for leveling the playing field by amending the Exchange Act to grant small community-based businesses, including small rural community-based communications providers, the same exemption that exists today for community-based banks.
NTCA Applauds Tax Relief for American Families and Workers Act, Urges Inclusion of Broadband Grant Tax Treatment Act
NTCA–The Rural Broadband Association CEO Shirley Bloomfield sent a letter this week to leadership of the Finance Committee of the United States Senate supporting the Tax Relief for American Families and Workers Act of 2024 and encouraging the committee to include legislation to ensure broadband grants are no longer taxable.
