NACo is supporting Senate (S. 2698) and House (H.R. 4728) legislation that would provide a 10 percent tax credit to telecommunications companies that provide high-speed broadband service to rural and underserved communities and a 20 percent tax credit for the next generation of broadband. Its aim is to close the digital divide.

The digital divide is a NACo legislative priority. The legislation also reflects one of the recommendations of the Telecommunications Task Force that was approved by the Board of Directors at the NACo Annual Conference. Commenting on the legislation, Council Member Marilyn Praisner, chair of the Telecommunications Task Force and chair of NACo’s new Telecommunications and Technology Steering Committee, said, “This is a very important bill for NACo and the country. The beauty of the tax credit approach is its simplicity and that it is industry- neutral. Any industry or company that provides broadband to rural or underserved communities is eligible. No one has an advantage.”

NACo has heard consistently from rural counties that they are not receiving high-speed internet or broadband service and are concerned that it may never get to some of their communities. This is an economic development issue. NACo’s position has been that without federal intervention, such as the provision of a tax credit, those rural and underserved communities on the wrong side of the “digital divide” will fall further behind those communities that have broadband service.

While there is a great deal of support in Congress for this tax credit – the Senate bill has 50 co-sponsors – time is running out this year. It appears unlikely that there will be a separate vote on either the Senate or House bills.

The broadband tax credit legislation has been made a part of the Senate version of the Community Renewal and New Markets Act, a bill that includes various tax initiatives.

One scenario is that this legislation will get adopted prior to adjournment with the broadband credit included. Another option is that it could be attached to a piece of “must pass” legislation,” such as an appropriations bill. A final option is that it would be included in an omnibus budget that Congress adopts at the end of the session.

County officials are urged to contact their senators and representatives urging passage of the broadband tax credit prior to adjournment.