House passes bill to exempt federal broadband grants from state income tax

Lansing ' The Michigan House on Wednesday passed House Bill 4287, the Michigan Broadband Accessibility Act, a measure supporters said will exempt federal grants used for broadband expansion from being counted as taxable income under state law.

Representative Bonack, the bill's sponsor, said the change aims to ensure taxpayer-funded grants are spent entirely on extending reliable internet access, especially to rural communities.

"The bill, if enacted, would ensure that taxpayer dollars go completely toward the expansion of reliable internet access and exempt federal grant money from the state's redundant double tax," Representative Bonack said on the House floor. "This only slows the expansion of reliable affordable internet, thereby blocking these essential resources from reaching all Michigan residents." (Representative Bonack)

Bonack argued that exempting federal broadband grants from state tax treatment would remove a disincentive that currently slows deployment of telehealth, online schooling and other internet-enabled services.

The House considered the bill read for a third time by its title and held a recorded roll call. The clerk announced 97 "aye" votes and 8 "nay" votes; the majority of the members elected and serving voted in favor and the bill passed. The majority floor leader then moved for immediate effect, and the House ordered immediate effect.

The bill's passage means the measure will be transmitted to the Senate and, if enacted there and signed by the governor, will change how certain federal broadband grants are treated for state tax purposes.