A BILL to amend and reenact §§ 58.1-322.02 and 58.1-402 of the Code of Virginia, relating to income tax subtraction; broadband grant fund awards.
HB1155 amends Virginia’s individual and corporate income tax statutes to create a new subtraction for broadband grant funds received on or after January 1, 2025, and a corresponding corporate deduction for the same funds. The bill defines broadband grant funds broadly to include monetary awards or disbursements from the federal government, the Commonwealth, local governments, agencies, or public bodies, so long as the money is awarded exclusively to plan, construct, expand, or improve broadband infrastructure and services in Virginia. It also bars the subtraction or deduction for any income or interest earned from investing or using those funds for unrelated purposes.
In addition to the broadband provision, the bill adds a new corporate deduction beginning January 1, 2026 for the cost of installing a qualifying upgrade required to interconnect a triggering project, with a cross-reference to existing utility law definitions. The measure otherwise leaves in place the long list of existing Virginia income tax subtractions and corporate additions, but it expands the state tax code by expressly exempting these broadband-related grant receipts from Virginia taxable income. Because the bill was left in the House Finance Committee, it did not advance in the available legislative history.
The bill would amend §§ 58.1-322.02 and 58.1-402 of the Code of Virginia to reduce taxable income for individuals and corporations receiving qualifying broadband grant funds, beginning with taxable years on and after January 1, 2025. It would also create a separate corporate deduction for certain interconnection upgrade costs beginning January 1, 2026. The practical effect is to exempt covered broadband grant awards from Virginia income tax and to reduce tax liability for businesses incurring specified grid or infrastructure interconnection expenses, while preserving existing limits that disallow tax benefits for unrelated investment income derived from those funds.
The available record shows no committee transcript and no recorded votes, so there is no documented floor or committee debate to gauge sentiment directly. The bill’s introduction and referral to Finance suggest it was treated as a tax policy measure with fiscal implications, and its subject matter indicates support for broadband deployment and infrastructure investment. Its final status, left in Finance, suggests it did not gain enough momentum to move forward in the committee process.
The main policy issue is the revenue impact of exempting broadband grant funds from state income tax and allowing a related deduction for interconnection upgrade costs. Supporters would likely view the bill as encouraging broadband expansion and lowering project costs, especially in underserved areas. Potential critics may focus on the breadth of the exemption, the loss of tax revenue, and whether the deduction could extend benefits beyond direct infrastructure spending. No specific named opponents or proponents appear in the provided materials, and there is no recorded debate to identify more detailed points of contention.