NARUC Asks For Clarification on Broadband Grant Tax Status

The National Association of Regulatory Utility Commissioners has asked the Treasury Department to clarify that the government's broadband stimulus grants are not taxable.

NARUC says that the Recovery Act grants for smart grid energy projects have been held up because nowhere in the act does it say whether the government billions are taxable. It argues that not to make them tax-deductible would be counterproductive and work against the goal of simulating the economy. There is the same confusion about the tax status of the $7.2 billion in broadband grants being handed out by the Department of Commerce's National Telecommunications & Information Administration and the USDA's Rural Utilities Service. In a letter to Treasury Secretary Tim Geithner, top NARUC officials say the issue is critical and that grant recipients are worried. Even tax experts aren't sure, and neither NTIA nor RUS can resolve the uncertainty.