Tax Bill Extends Broadband Buildout Booster

Film, TV credit, R&D booster also included
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Congress Friday passed a package of tax provisions that included some breaks for media companies.

The new budget/tax package extends tax breaks that cable operators say have helped them invest in broadband buildouts, as well as a break for TV and film producers and a tax credit for R&D.

CenturyLink, for one, had pressed House speaker Paul Ryan (R-Wis.) not to let the accelerated and bonus depreciation provisions in the tax law expire Dec. 31. They were adopted to goose the economy during the Great Recession, but were extended for two more years in 2013 when they were initially to have sunset.

According to a website dedicated to the tax issue, the 50% depreciation bonus helps businesses cut their tax bills on new equipment purchases by allowing them to write off more of the cost.

CenturyLink said the provisions have helped the company invest billions of dollars to launch a gigabit network and that it continues to invest hundreds of millions in residential speed upgrades, fiber-to-tower, investments that would have slowed if the tax break were not extended.

According to the budget bill, that bonus depreciation will be extended through 2019, though it ramps down to a 40% bonus in 2018 and 30% in 2019.

The film and tax section of the bill extends special expensing provisions (limited to the first $15 million for qualified film, TV and theater productions).

Also in the bill is a permanent extension for a research and development tax credit, which helps keep that R&D onshore, which the Information Technology and Innovation Foundation applauded, as well as the bonus depreciation.

"Without pioneering new ideas and equipment, innovation and productivity will be stuck in neutral," said ITIF. "By making the R&D tax credit permanent, policymakers are giving companies a predictable incentive to increase spending on research and development, which accrues to the benefit of the public at large. The legislation also provides an additional incentive for startups to conduct R&D, which will accelerate growth."

"By extending bonus depreciation, this legislation provides an additional incentive for the kind of capital investment that grows the economy, creates more jobs, and drives up wages. But while extending this provision is an important first step, we continue to urge Congress to eventually make bonus depreciation permanent."

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