Rural Broadband Tax Credit

(a)

In general

The Internal Revenue Code of 1986 is amended by inserting after subsection 48D the following new section:

48E

Rural Broadband Credit

(a)

In general

For the purposes of section 38, the rural broadband credit for any taxable year is an amount equal to 30 percent of the basis of qualified broadband property placed in service by the taxpayer during such taxable year. (b)

Cap on credit amount

(1)

In general

The amount of the credit allowable to a taxpayer under subsection (a) for any property for a taxable year shall not exceed an amount equal to the product of— (A)the value of the number of qualified potential customers served by the qualifying broadband project for which such property is necessary, multiplied by (B)$170. (2)

Qualified potential customer

For purposes of this section, the term qualified potential customer means, with respect to a taxpayer, an individual— (A)who resides in a qualified rural census tract, and (B)whom such taxpayer demonstrates to the satisfaction of the Secretary would upon request be provided broadband service by the taxpayer for a customary charge for commencing broadband service of no more than $1,000. (c)

Qualified broadband property

For the purposes of this section— (1)

In general

The term qualified broadband property means property necessary for a qualifying broadband project. (2)

Qualifying broadband project

The term qualifying broadband project means any project designed to expand the number of individuals with broadband service in a qualified rural census tract. (3)

Broadband service

The term broadband service means broadband service (as defined in section 601(b) of the Rural Electrification Act of 1936) that meets the minimum acceptable level for such service (as established by the Secretary of Agriculture pursuant to section 601(e) of the Rural Electrification Act of 1936). (4)

Qualified rural census tract

The term qualified rural census tract means a census tract designated not later than December 31, 2018, by the Secretary (in consultation with the Chairman of the Federal Communications Commission, the Assistant Secretary of Commerce for Communications and Information who is head of the National Telecommunications and Information Administration, and the Secretary of Agriculture) as— (A)being rural, and (B)having less than 50 percent of residents with access to broadband service. (d)

Carryover of certain amounts

If, for the taxable year, the amount which (but for subsection (b)) would have been taken into account under subsection (a) exceeds the limitation of subsection (b), then the amount of such excess shall be taken into account under subsection (a) for the succeeding taxable year. (e)

Termination

This section shall not apply to property placed in service after December 31, 2028.

(b)

Conforming amendment

Section 46 is amended by striking and at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting , and, and by adding at the end the following new paragraph:

(7)the rural broadband credit.

(c)

Clerical amendment

The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

Sec. 48E. Rural broadband credit.

(d)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2018.