An Act to create 71.05 (1) (j), 71.26 (1) (j), 71.34 (1k) (q) and 71.45 (1) (dp) of the statutes; Relating to: an income and franchise tax exemption for broadband expansion grants and for federal high-cost program funding for broadband expansion. (FE)
Summary
AB208 would create new Wisconsin tax exemptions and deductions for certain payments used for broadband expansion. Specifically, it excludes from state income and franchise taxation grants provided by the state, local governments, tribal governments, or the federal government when those funds are used for broadband expansion in Wisconsin. It also covers funding received through federal high-cost universal service programs established under 47 U.S.C. 254, which are intended to support broadband deployment in higher-cost areas.
The bill amends multiple parts of the Wisconsin statutes governing individual and corporate income tax and franchise tax, adding parallel provisions so the exemption applies across different taxpayer categories. It also includes anti-double-dipping language preventing a taxpayer from claiming the new exemption or deduction for amounts already exempted under existing broadband-related tax provisions. The bill would apply first to taxable years beginning after December 31, 2024.
Impact
AB208 would reduce taxable income for recipients of qualifying broadband expansion grants and federal high-cost broadband support, thereby lowering state income and franchise tax liability for affected individuals and entities. It expands Wisconsin’s current broadband-related tax treatment beyond existing coronavirus-relief-funded allocations to include a broader set of public and federal broadband funding sources. The bill would affect the administration of chapters 71.05, 71.26, 71.34, and 71.45 of the Wisconsin statutes and could have a modest negative fiscal impact on state revenues, depending on the amount of qualifying funding received.
Sentiment
The bill appears to have been generally favorable in concept, as reflected by its broad bipartisan and bicameral list of authors and cosponsors and its focus on encouraging broadband deployment. However, there is no recorded committee transcript or vote history in the provided materials, and the bill ultimately failed to pass pursuant to Senate Joint Resolution 1. That suggests the proposal had support but did not advance through the full legislative process.
Contention
The main policy issue is whether grants and federal high-cost broadband funds should be exempt from state income and franchise taxes, which would benefit broadband providers, contractors, and other recipients of expansion funding. Potential concerns likely center on reduced state revenue, the breadth of the exemption across multiple funding sources, and whether the tax preference is necessary given existing exemptions for some broadband-related allocations. The bill also contains technical coordination language to prevent overlapping claims with current law, indicating attention to avoiding duplicate tax benefits.
Crossfiled
An Act to create 71.05 (1) (j), 71.26 (1) (j), 71.34 (1k) (q) and 71.45 (1) (dp) of the statutes; Relating to: an income and franchise tax exemption for broadband expansion grants and for federal high-cost program funding for broadband expansion. (FE)